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or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.,
attached to petitioners' 2000 return. Petitioners omitted the
Form W-2 containing the information from Mr. Sullivan's
employment with CEMAX and did not report the $105,000 Mr.
Sullivan earned or the taxes withheld from that salary.
When he received the return from his C.P.A., Mr. Sullivan
examined petitioners' "year-over-year" comparison to make sure
the income numbers looked right. This "year-over-year"
comparison prepared by the C.P.A. is a 2-year comparison
worksheet which identifies pertinent tax figures for the current
and previous year and then shows increase or decreases. It is
not the tax return itself. Mr. Sullivan did not speak directly
with the C.P.A. who prepared his return, nor did he inform the
C.P.A. that he had changed employment during 2000.
Respondent conducted an audit of petitioners' return and
issued the notice of deficiency determining the accuracy-related
penalty.
Discussion
Section 6662(a) imposes a penalty in the amount of 20
percent of the portion of the underpayment to which the section
applies. As relevant to this case, the penalty applies to any
portion of the underpayment that is attributable to any
substantial understatement of income tax. Sec. 6662(b)(2).
There is a "substantial understatement of income tax" if the
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