§1219

1219(a)(1)(A), (e)(1), 120 Stat. at 1083, 1085. In the case of an individual the substantial valuation misstatementpenalty applies only where the portion ofthe underpayment for the taxable year attributable to the substantial valuation misstatementexceeds $5,000. See sec. 6662(e)(2). Generally, the accuracy-relatedpenalty does not apply with respect to any portion ofthe underpayment for which the taxpayer shows that there was reasonable cause and that he or she acted in good faith.

1219(e)(3), 120 Stat. at 1086. 2. Pre-PPA Returns Dr. Zarlengo's 2004jointreturn and Ms. Sandin-Zarlengo's 2005 return were filed before July 25, 2006. Therefore, the PPA does not apply to those returns.

1219(e)(3), 120 Stat. at 1086. 2. Pre-PPA Returns Dr. Zarlengo's 2004jointreturn and Ms. Sandin-Zarlengo's 2005 return were filed before July 25, 2006. Therefore, the PPA does not apply to those returns.

Before the enactment of the PPA, the penalty applied when taxpayers misstated the value of property by 400% or more; PPA § 1219(a)(2), 120 Stat.

Section 170(f)(11)(A)(i) now provides that “no deduction shall be allowed .

s v. Commissioner, slip op. at 25. The value ofpetitioners' easement is $104,000. II. Penalties Respondent contends that petitioners are liable for penalties under section 6662(h) or, in the alternative, under section 6662(a). A. Section 6662(h) PPA sec. 1219(a), 120 Stat. at 1083, made several changes to section 6662(h). Section 6662(h) provides a 40% penalty for gross valuation misstatements. Gross valuation misstatements occurs when the value ofany property reported on an income tax return is

at 441-442; see also Vaughn v.

Record Unclear as to Whether Appraisal Prepared by a Qualified Appraiser Regulations require that a qualified appraisal be prepared, signed, and dated by a qualified appraiser as defined in section 1.170A-13(c)(5), Income Tax Regs.15 Sec.

gross valuation misstatement occurs if the value is 400 percent or more of the amount determined to be the correct valuation, and the penalty increases to 40 percent of the resulting underpayment. The Pension Protection Act of 2006, Pub. L. 109-280, sec. 1219, 120 Stat. 1083, modified secs. 6662(c) and 6664 (c) (2) with respect to returns filed after Aug. 17, 2006. It lowered the percentage threshold for substaniial valuation misstatements to 150 percent and for gross valuat on misstatements to

gross valuation misstatement occurs if the value is 400 percent or more of the amount determined to be the correct valuation, and the penalty increases to 40 percent of the resulting underpayment. The Pension Protection Act of 2006, Pub. L. 109-280, sec. 1219, 120 Stat. 1083, modified secs. 6662(c) and 6664 (c) (2) with respect to returns filed after Aug. 17, 2006. It lowered the percentage threshold for substaniial valuation misstatements to 150 percent and for gross valuat on misstatements to

ement if the value of property shown on the estate-tax return is 50 percent or less of the correct value. Sec. 6662(g) (1) (effective for tax returns filed before the August 17, 2006, amendment by the Pension Protection Act of 2006, Pub. L. 109-280, sec. 1219(a) (1) (]B), 120 Stat. 1083). On its estate-tax return, the estate claimed that the value of the 41.128-percent limited - partner interest was $12,678,117. This is less than 50 percent of the correct value of $27,454,115. Therefore there wa

ceptable appraisal standards and is treated as a qualified appraisal under the regulations and other guidance provided by the Secretary.' Seå. 170(f) (11) (E). 7Sec. 170(f) (11) (E) was amended by the Pension Protection Act of 2006, Pub. L. 109-280, sec. 1219(c) (1), 120 Stat. 1085. As amended, sec. 170(f) (11) (E) codifies the definition of qualified appraisals and appraisers and is effective generally for appraisals prepared with respect to returns or submissions filed after Aug. 17, 2006. Id.

nto section 6664(a). Congress did not do so. Co gress has amended section 6664 on, three occasions but has not faltered the definition of-the term, "underpayment" in response do the regulation. See Pension Protection Act of 2006, Pub.t| L. 109-280, sec. 1219, 120 Stat.s 1083,; 'Gulf Opportunity Zone ct of 2005,e Pub. L. 109-135, sec. 403, 119 Stat. 2615; Americ n Jobs Creation Act of 2004, Pub. L. 108-357, sec. 812, 118 Stat 1577. The Secretary has folldwed Congress' intent to carve out a specia