- 6 -
v. Commissioner, 116 T.C. 438, 446 (2001). However, the burden
of proof remains with petitioners on that issue. See Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933); Higbee v.
Commissioner, supra at 446-447.
As pertinent here, section 6662(a) imposes an accuracy-
related penalty equal to 20 percent of the underpayment of tax
resulting from a substantial understatement of tax. Sec.
6662(b)(2). An understatement is equal to the excess of the
amount of tax required to be shown in the tax return over the
amount of tax shown in the tax return, sec. 6662(d)(2)(A), and is
substantial in the case of an individual if it exceeds the
greater of 10 percent of the tax required to be shown or $5,000,
sec. 6662(d)(1)(A).
In Schedule C of their 1999 joint return, petitioners
included nonemployee compensation from Windermere of only $1,892.
That is because, due to the alignment error in Form 1099 that
Windermere issued to Mr. Larson for 1999, petitioners assumed
that $1,892 was the amount of nonemployee compensation reported
in that form, when in fact $21,891.95 was the amount of such
compensation reported in that form. Petitioners do not dispute
that Windermere paid nonemployee compensation of $21,891.95 to
Mr. Larson during 1999. Nor do petitioners dispute that the
understatement of tax in this case exceeds the greater of 10
7(...continued)
tial authority, or similar provisions. * * * the taxpayer bears
the burden of proof with regard to those issues.” Higbee v.
Commissioner, 116 T.C. 438, 446 (2001).
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