PUBLIC LAW 101-239—DEC. 19, 1989 103 STAT. 2397 corporation other than an S corporation or a personal holding company (as defined in section 542)). "(f) SUBSTANTIAL OVERSTATEMENT OF PENSION LIABILITIES. — "(1) IN GENERAL.—For purposes of this section, there is a substantial overstatement of pension liabilities if the actuarial determination of the liabilities taken into account for purposes of computing the deduction under paragraph (1) or (2) of section 404(a) is 200 percent or more of the amount determined to be the correct amount of such liabilities. "(2) LIMITATION.—No penalty shall be imposed by reason of subsection (b)(4) unless the portion of the underpayment for the taxable year attributable to substantial overstatements of pen- sion liabilities exceeds $1,000. " (g) SUBSTANTIAL ESTATE OR GIFT TAX VALUATION UNDERSTATE- MENT.— "(1) IN GENERAL.—For purposes of this section, there is a substantial estate or gift tax valuation understatement if the value of any property claimed on any return of tax imposed by subtitle B is 50 percent or less of the amount determined to be the correct amount of such valuation. "(2) LIMITATION.—No penalty shall be imposed by reason of subsection (b)(5) unless the portion of the underpayment attrib- utable to substantial estate or gift tax valuation understate- ments for the taxable period (or, in the case of the tax imposed by chapter 11, with respect to the estate of the decedent) exceeds $5,000. "(h) INCREASE IN PENALTY IN CASE OF GROSS VALUATION MISSTATEMENTS. — "(1) IN GENERAL. — To the extent that a portion of the underpayment to which this section applies is attributable to one or more gross venation misstatements, subsection (a) shall be applied with respect to such portion by substituting *40 percent' for '20 percent'. "(2) GROSS VALUATION MISSTATEMENTS. — The term 'gross valu- ation misstatements' means— "(A) any substantial valuation overstatement under chap- ter 1 as determined under subsection (e) by substituting '400 percent' for '200 percent*, "(B) any substantial overstatement of pension liabilities as determined under subsection (f) by substituting '400 percent' for '200 percent', and "(C) any substantial estate or gift tax valuation under- statement as determined under subsection (g) by substitut- ing '25 percent' for '50 percent'. "SEC. 6663. IMPOSITION OF FRAUD PENALTY. "(a) IMPOSITION OF PENALTY. — I f any part of any underpa3mient of tax required to be shown on a return is due to fraud, there shall be added to the tax an amount equal to 75 percent of the portion of the underpayment which is attributable to fraud. " (b) DETERMINATION OF PORTION ATTRIBUTABLE TO FRAUD.—I f the Secretary establishes that any portion of an underpayment is attrib- utable to fraud, the entire underpa3mient shall be treated as attrib- utable to fraud, except with respect to any portion of the underpayment which the taxpayer establishes (by a preponderance of the evidence) is not attributable to fraud.
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