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(1954). Finally, we are struck by petitioner’s inability to tell
the same story twice. All of these considerations lead us to
conclude that petitioner’s allegations have more mendacity than
truthfulness.6 We sustain respondent’s determinations as to the
unreported income.
Accuracy-Related Penalties
Section 6662 imposes an accuracy-related penalty “equal to
20 percent of the portion of the underpayment” of tax
attributable to “Any substantial understatement of income tax”.
Sec. 6662(a) and (b)(2). A substantial understatement of income
tax exists if the amount of the understatement for the taxable
year exceeds the greater of 10 percent of the tax required to be
shown on the return for the taxable year or $5,000. Sec.
6662(d)(1)(A).
However, “No penalty shall be imposed * * * if it is shown
that there was a reasonable cause * * * and that the taxpayer
acted in good faith”. Sec. 6664(c). Petitioner failed to
address the accuracy-related penalties at trial and offered no
5(...continued)
petitioner’s mother received $4,881 from two sales of stock in
1997. There is no evidence to indicate that petitioner received
these proceeds. His aunt did not file tax returns for 1995 and
1996, and respondent’s summary of records indicates that she
received total income of $13,075 in 1995 and $10,635 for 1996.
6 Given the lack of records and the lack of credibility in
petitioner’s testimony, sec. 7491(a), pertaining to shifting the
burden of proof, has no application here.
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