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determination of any remaining substantial understatement is
primarily a computational matter, which we leave to the parties.
Accordingly, the burden rests on petitioner to show
mitigating circumstances such as substantial authority, a
reasonable basis, or reasonable cause. Petitioner on brief
claims to have had substantial authority, a reasonable basis,
reasonable cause, and good faith with respect to its reporting of
the preneed contract payments. In contrast, petitioner directs
no comments to the various conceded adjustments, nor did
petitioner introduce any evidence pertaining to these items.
Furthermore, although petitioner generally points out that its
returns were prepared by a professional tax adviser, again there
has been no showing whatsoever regarding what information
petitioner supplied on the conceded items. We therefore lack
grounds on which to conclude that the incorrect return resulted
from the preparer’s errors. Respondent’s determination of the
section 6662 penalty is sustained to the extent warranted by
computations made in accordance with our holding for petitioner
on the preneed accounting issue.
To reflect the foregoing,
An appropriate order will
be issued, and decision will
be entered under Rule 155.
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