-7- rebate. Sec. 6662(d)(2). Under section 6662(d)(1), the understatement is substantial if the amount of the understatement exceeds the greater of (1) 10 percent of the tax required to be shown on the return or (2) $5,000. Here, petitioners received $65,210 of income from RPT PRN LLC. They reported, however, only $18,814 of income received from RPT PRN LLC in their tax return. Petitioners’ tax return showed $13,176 as tax due, while the actual tax due was $26,948. Petitioners failed to raise any non-partnership-level issues as to the deficiency, and they have failed to raise any other defenses in order to avoid the accuracy-related penalty under section 6662(a). See secs. 6662(d)(2)(B), 6664(c)(1); sec. 1.6664-4(b)(1), (c)(1)(i), (e)(1), Income Tax Regs. It follows that petitioners had a substantial understatement of tax. Therefore, we hold that petitioners are liable for the accuracy- related penalty of $2,754.40 under section 6662(d). We have considered all arguments made by the parties and have found those arguments not discussed herein to be irrelevant and/or without merit. To reflect the foregoing, An appropriate order and decision will be entered for respondent.Page: Previous 1 2 3 4 5 6 7
Last modified: May 25, 2011