-31-
petitioner did not sell any shares of CTI she obtained through
the March 5, 2002, exercise of stock options. See Merlo v.
Commissioner, T.C. Memo. 2005-178. While petitioner might have
violated CTI’s insider trading policy had she sold her CTI stock
to a third party upon receiving it, the possibility of such a
violation does not create a substantial risk of forfeiture within
the meaning of section 83. See United States v. Tuff, supra at
1255-1256.
D. Accuracy-Related Penalty
Respondent determined that petitioners are liable for an
accuracy-related penalty under section 6662(a) and (b)(2) for a
substantial understatement of income tax. In part, section
6662(a) and (b)(2) imposes a 20-percent accuracy-related penalty
for any portion of an underpayment that is attributable to a
substantial understatement of income tax. An “understatement” is
the excess of the amount of tax required to be shown on the
return for the taxable year over the amount of tax imposed that
is shown on the return, reduced by any rebate. Sec. 6662(d)(2).
A substantial understatement of income tax exists for any taxable
year for purposes of section 6662 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, in the case of an individual, $5,000. Sec.
6662(d)(1)(A).
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