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Based upon the above, we find that petitioner received a
lump sum distribution in his individual name as the beneficiary
of Martin’s plan. Accordingly, $77,994.31 is includable in
petitioner’s gross income.
The last issue for decision is whether petitioner is liable
for an accuracy-related penalty pursuant to section 6662(a) for
the year in issue. Section 6662(a) imposes a penalty of 20
percent of the portion of the underpayment which is attributable
to any substantial understatement of income tax. Sec.
6662(b)(2). 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. Petitioner apparently sought no advice on the
matter, and made no argument at trial. Accordingly, we sustain
respondent’s determination.
We have considered all arguments made by the parties, and,
to the extent not discussed above, conclude they are irrelevant
or without merit.
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Last modified: May 25, 2011