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because petitioners did not act with reasonable cause and in good
faith, section 6661(c) is not applicable.
In each of the relevant years, 10 percent of the amount of
tax required to be shown on petitioners’ return is less than
$5,000. Because each of the understatements in 1984, 1985, 1987,
and 1988, is greater than $5,000, the understatements are
attributable to substantial understatements of income tax, as
defined in section 6661(b)(1)(A).
We have sustained respondent’s determination that
petitioners are liable for the section 6659(a) addition to tax
with respect to the entire amount of the deficiencies in 1984 and
1985. Thus, we hold that petitioners are not liable for the
section 6661(a) additions to tax in those years. Sec.
6661(b)(3).
We have sustained respondent’s determination that
petitioners are liable for the section 6659(a) addition to tax
with respect to the portions of the deficiencies in 1987 and 1988
that are attributable to the disallowance of the Schedule F
depreciation deductions. Thus, we hold that petitioners are not
liable for the section 6661(a) additions to tax with respect to
those portions of the deficiencies in those years. Petitioners,
however, are liable for the section 6661(a) additions to tax with
respect to the portions of the deficiencies in 1987 and 1988 that
are attributable to the disallowance of the Schedule F deductions
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