Disallowance of a political-donation deduction does not, without...

Disallowance of a political-donation deduction does not, without more, establish misreporting for enhanced penalty purposes. A valid misreporting charge requires proof that the taxpayer's conduct falls within a specified statutory category, such as suppression of facts, false entries, or an evidentially unsupported claim; an adverse finding on the deduction's genuineness is insufficient by itself. Transparent disclosure and a bona fide, fully supported explanation remain relevant to ordinary under-reporting. Notices and penalty orders must clearly distinguish under-reporting from misreporting, identify the precise allegation, and provide a meaningful opportunity to respond. Acceptance of a disallowance is not an admission of misreporting.