John R. Toney - Page 15

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          10 percent of the tax required to be shown on the return for the            
          taxable year in issue and $5,000.  See sec. 6661(b)(1)(A).                  
          Accordingly, petitioner’s understatement is substantial.  Neither           
          exception under section 6661(b)(2)(B) applies because no amounts            
          were adequately disclosed or supported by substantial authority.            
               We have considered all arguments made by the parties, and to           
          the extent not mentioned above, we find them to be irrelevant or            
          without merit.                                                              
               To reflect the foregoing,                                              
                                                  An appropriate order and            
                                             decision will be entered.3               


















               3  It is undisputed that petitioner has paid to respondent             
          $2,925 in restitution pursuant to the order of the U.S. District            
          Court.  We expect petitioner to be given credit for his $2,925              
          restitution payment for taxable year 1986.  Cf. M.J. Wood                   
          Associates, Inc. v. Commissioner, T.C. Memo. 1998-375.                      





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