- 6 - 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).Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011