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return. Petitioner failed to argue that the failure was the
result of reasonable cause. Because the 1989 return was 5 months
late under section 6651(a)(1), we find that petitioner is liable
for an addition to tax equal to 25 percent of the amount required
to be shown on the return in 1989, as determined by respondent.
V. Section 6661--Substantial Understatement
Section 6661(a), as in effect for 1988, provides that “If
there is a substantial understatement of income tax for any
taxable year, there shall be added to the tax an amount equal to
25 percent of the amount of any underpayment attributable to such
understatement.” There is a substantial understatement of income
tax if the amount of the understatement exceeds the greater of
(1) 10 percent of the tax required to be shown on the return for
the taxable year or (2) $5,000. Sec. 6661(b)(1)(A). An
“understatement” means the excess of the amount of tax required
to be shown on the return for the taxable year over the amount of
tax that is shown on the return. Sec. 6661(b)(2)(A). The amount
of the understatement shall be reduced by any item adequately
disclosed on the return or supported by substantial authority.
Sec. 6661(b)(2)(B). The taxpayer bears the burden of proving
that the Commissioner erred in imposing the addition to tax under
section 6661(b). Rule 142(a); Hamilton v. Commissioner, T.C.
Memo. 2004-66.
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