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comply with internal revenue laws or to exercise ordinary and
reasonable care in preparing a tax return. See sec. 6662(c).
An understatement is substantial if it exceeds the greater of 10
percent of the tax required to be shown on the return or $5,000.
See sec. 6662(d)(1)(A).
Petitioners concede that they are liable for the section
6662 accuracy-related penalty if we find that they earned any of
the $149,200 seized from petitioner’s participation in a fencing
operation in 1997. Because we found that petitioners had
unreported taxable income of $109,200 from petitioner’s
participation in the fencing operation in 1997, we hold that
petitioners are liable for the section 6662 accuracy-related
penalty for 1997.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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