Stephen J. Major - Page 10

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          do what a reasonable and ordinarily prudent person would do under           
          the circumstances.’”  Neely v. Commissioner, 85 T.C. 934, 947               
          (1985) (quoting Marcello v. Commissioner, 380 F.2d 499, 506 (5th            
          Cir. 1967), affg. in part and remanding in part on another issue            
          43 T.C. 168 (1964) and T.C. Memo. 1964-299).  A “substantial                
          understatement” exists where the amount of the understatement               
          exceeds the greater of 10 percent of the tax required to be shown           
          on the return for the taxable year or $5,000.  Sec. 6662(d)(1).             
               No penalty shall be imposed if it is shown that there was              
          reasonable cause for the underpayment and the taxpayer acted in             
          good faith with respect to the underpayment.  Sec. 6664(c).                 
               Petitioner failed to address the accuracy-related penalty              
          and offered no evidence that he had reasonable cause for the                
          underpayment.  Accordingly, we sustain respondent’s                         
               We have considered all arguments made by the parties, and,             
          to the extent not discussed above, conclude they are irrelevant             
          or without merit.                                                           
               Reviewed and adopted as the report of the Small Tax Case               
                                                  Decision will be entered            
                                             under Rule 155.                          

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