AMENDMENT 426

Amendment: The Commentary to §2T1.3 captioned "Application Notes" is amended by inserting the following additional note:

"4. The amount by which the greater of gross income and taxable income was understated, plus 100 percent of the total amount of any false credits claimed against tax is calculated as follows: (1) determine the amount, if any, by which the gross income was understated; (2) determine the amount, if any, by which the taxable income was understated; and (3) determine the amount of any false credit(s) claimed (a tax ‘credit’ is an item that reduces the amount of tax directly; in contrast, a ‘deduction’ is an item that reduces the amount of taxable income). Use the amount determined under step (1) or (2), whichever is greater, plus any amount determined under step (3).".

Reason for Amendment: This amendment clarifies the operation of the guideline.

Effective Date: The effective date of this amendment is November 1, 1991.