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wrong. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115
(1933). Petitioner is deemed to have stipulated that he
understated his income tax liabilities for 1986, 1987, 1988, and
1989 in the amounts shown as deficiencies, and the record
contains no evidence that would support a contrary finding. Nor
does the record contain any evidence to prove wrong the
deficiency for 1992 or the additions to tax under section
6661(a). For returns due before January 1, 1990, a taxpayer
whose return contains a substantial understatement of income tax
is liable for an addition to tax under section 6661 equal to 25
percent of the underpayment attributable to the understatement.
Pallottini v. Commissioner, 90 T.C. 498, 500-503 (1988).1
As to respondent’s determination of these deficiencies and
additions thereto, petitioner relies solely on his argument that
the notice of deficiency is invalid because, he alleges,
respondent impermissibly used grand jury material during the
audit underlying the notice of deficiency. At trial, petitioner
called two witnesses to attempt to prove this allegation. The
first witness was a special agent in respondent’s Criminal
1 An understatement is substantial if it exceeds the greater
of: (a) 10 percent of the tax required to be reported on the
return or (b) $5,000. Sec. 6661(b)(1)(A)(i) and (ii). An
understatement is reduced to the extent: (1) The position taken
resulting in the understatement was supported by substantial
authority, or (2) the taxpayer adequately disclosed in the
return, or in an attachment, relevant facts relating to his or
her position. Sec. 6661(b)(2)(B)(i) and (ii).
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