Joseph P. and Marilyn Schneller - Page 13

          sufficient knowledge to understand, and in fact knew, the benefits                 
          flowing to them by Mr. Arthur’s acts.  They could have objected to                 
          the writeoff but either affirmatively acquiesced in it or purposely                
          chose to be silent.  Accordingly, we conclude that petitioners had                 
          no reasonable cause for omitting income realized from the discharge                
          of indebtedness.  We therefore hold that the underpayment of tax                   
          was due to petitioners’ negligence and disregard of rules or                       
                To reflect the foregoing,                                                    

                                                      Decision will be entered               
                                                 for respondent.                             

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