- 43 -
taxpayer bears the burden of proof with regard to those issues.”
Id.
It is petitioners’ position that they are not liable for
1999 for the portion of the accuracy-related penalty that is
attributable to their not reporting the December 2, 1999 transac-
tion as a sale in their 1999 return.35 In support of their posi-
tion, petitioners argue that there is or was substantial author-
ity for that return position. Consequently, according to peti-
tioners, if the Court were to sustain respondent’s determination
in the notice with respect to the December 2, 1999 transaction,
as the Court has, the understatement of tax attributable to
petitioners’ failure to report that transaction as a sale in
their 1999 return should be reduced pursuant to section
6662(d)(2)(B)(i). In that event, petitioners maintain, there
would be no substantial understatement of tax in their 1999
return within the meaning of section 6662(d)(1)(A). (We shall
refer to petitioners’ argument under section 6662(d) as petition-
ers’ substantial authority argument.)
As we understand petitioners’ substantial authority argu-
35Petitioners do not maintain that they are not liable for
1999 for the portion of the accuracy-related penalty under sec.
6662(a) that is attributable to the following determinations that
respondent made for that year and that they do not dispute:
(1) $5,200 increase in petitioners’ Schedule C gross receipts and
(2) $1,715 decrease in their claimed Schedule C interest expense.
Page: Previous 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Next
Last modified: November 10, 2007