David M. and Teri L. Saykally - Page 40

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          understatement, it “does not apply with respect to any other                 
          penalty provision (including the negligence or disregard                     
          provisions of the �6662 accuracy-related penalty).”  We agree                
          with respondent that a prudent taxpayer would have been warned of            
          a potential problem with his return by an additional $60,000                 
          deduction.  Thus, we find that respondent’s imposition of a                  
          penalty for an erroneously claimed double deduction was                      
          substantially justified.                                                     
               To reflect the foregoing,                                               


                                                   Decisions will be entered           
                                              under Rule 155.                          












          Reporter’s Note: This report was modified by Order dated Sept. 4, 2003.      

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