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on" within the meaning of section 1.513-1(c)(2)(i), Income Tax
Regs.
We have considered all remaining arguments of petitioner
concerning the unrelated business income issue and find them to
be without merit. Based on the record in the instant case, we
conclude that all the elements of sections 512 and 513 and
section 1.513-1(a), Income Tax Regs., have been met.
Consequently, we hold that petitioner is liable for unrelated
business income tax on its advertising income.
Additions to Tax
Respondent determined in the notice of deficiency that
petitioner is liable for additions to tax pursuant to sections
6651(a)(1), 6653(a)(1) and (2), 6653(a)(1)(A) and (B), and
6661(a), and penalties pursuant to section 6662(a), for certain
taxable periods in issue. The instant case involves a complex
and close question of law. See Metra Chem. Corp. v.
Commissioner, 88 T.C. 654, 661 (1987); Belz Inv. Co. v.
Commissioner, 72 T.C. 1209, 1233 (1979), affd. 661 F.2d 76 (6th
Cir. 1981). Although we have distinguished Suffolk County
Patrolmen’s Association v. Commissioner, 77 T.C. 1314 (1981), we
conclude that the case provided petitioner with substantial
authority for its tax treatment of income from The Constabulary
and that petitioner's reliance on the case was reasonable under
the circumstances, considering the fact that this area of the law
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