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his returns timely. We therefore hold that petitioner is liable
for additions to tax under section 6651(a)(1) for 2000, 2001, and
2002.
4. Section 6654 Addition to Tax for 2003
Section 6654(a) imposes an addition to tax on an
underpayment of estimated tax unless one of the statutory
exceptions applies. See sec. 6654(e). The addition to tax is
calculated with reference to four required installment payments
of the taxpayer’s estimated tax liability. Sec. 6654(c)(1);
Wheeler v. Commissioner, 127 T.C. 200, 210 (2006). Each required
installment of estimated tax is equal to 25 percent of the
“required annual payment.” Sec. 6654(d)(1)(A). The required
annual payment is generally equal to the lesser of (1) 90 percent
of the tax shown on the individual’s return for that year (or, if
no return is filed, 90 percent of his or her tax for such year),
or (2) if the individual filed a return for the immediately
preceding taxable year, 100 percent of the tax shown on that
return. Sec. 6654(d)(1)(B); Wheeler v. Commissioner, supra at
210-211. A taxpayer has an obligation to pay estimated taxes for
a particular year only if he has a “required annual payment” for
that year. Wheeler v. Commissioner, supra at 211. The required
annual payment is determined with respect to the tax liability
shown on the taxpayer’s return for the preceding year even when
the return for the previous year fraudulently understates income,
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