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III. Accuracy-Related Penalties
Section 6662 imposes an accuracy-related penalty equal to 20
percent of any underpayment attributable to a substantial
understatement of income tax. See sec. 6662(a) and (b)(2).
Petitioners have not established, pursuant to section 6664(c)(1),
that there was a reasonable cause and that they acted in good
faith in claiming the deductions. Accordingly, petitioners are
liable for the accuracy-related penalties.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011