- 31 -
6661(a).22 Petitioners do not contend, however, that there was
substantial authority supporting the deduction of the partnership
loss that they claimed on their return. Nor do petitioners
contend that there was adequate disclosure of the facts related to
that loss. Rather, petitioners contend that they should be
absolved of liability for the addition to tax by virtue of section
6661(c).
Section 6661(c) vests the Commissioner with discretion to
waive the addition to tax under section 6661(a) if the taxpayer
shows that he or she acted with reasonable cause and in good
faith. The Commissioner’s failure to waive the addition to tax is
reviewed by this Court for abuse of discretion. Martin Ice Cream
Co. v. Commissioner, 110 T.C. 189, 235 (1998).
There is nothing in the record to suggest that petitioners
ever requested that respondent waive the addition to tax under
section 6661(a). Indeed, petitioners do not even allege that they
requested such a waiver. For that reason alone, petitioners are
not entitled to relief from liability. See McCoy Enters., Inc. v.
Commissioner, 58 F.3d 557, 563-564 (10th Cir. 1995), affg. T.C.
Memo. 1992-693; Kellen v. Commissioner, T.C. Memo. 2002-19;
22 We note that the understatement of tax on which
respondent determined the addition to tax is $12,355. The amount
required to be shown as tax on petitioners’ return is $103,069.
The understatement is therefore “substantial” because it exceeds
the greater of 10 percent of the amount required to be shown on
the return, or $5,000. Sec. 6661(a).
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