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6661 addition to tax if the taxpayer shows that he had reasonable
cause for the understatement and that he acted in good faith.
Sec. 6661(c).
The section 6661(a) addition to tax is not imposed on any
portion of a substantial understatement with respect to which an
addition to tax under section 6659 is imposed. Sec. 6661(b)(3).
If a substantial understatement exists in a taxable year, and the
section 6659(a) addition to tax is imposed only with respect to a
portion of that substantial understatement, then the section
6661(a) addition to tax is imposed with respect to the remainder
of the understatement. Sec. 1.6661-2(f)(1), Income Tax Regs.
As discussed above in connection with the negligence
additions to tax, petitioners did not understand the partnership
and farming losses and the general business credits, yet they did
not seek advice concerning these items. We conclude that
petitioners have not shown that they had substantial authority,
or that they acted with reasonable cause and in good faith with
respect to any portion of the understatements in each of the
relevant years. It is also evident from the record that
petitioners did not disclose the relevant facts concerning the
losses and credits. In the absence of substantial authority or
adequate disclosure, the amount of the understatement in each
year is not reduced pursuant to section 6661(b)(2)(B) and,
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