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relevant to the tax treatment of an item, including those
authorities pointing to a contrary result, are taken into
account. Id. Examples of authority include statutory and
regulatory provisions, legislative history, and administrative
interpretations of the Commissioner. Sec. 1.6662-4(d)(3)(iii),
Income Tax Regs. Legal opinions are not authority. The
authorities underlying a legal opinion, however, may give rise to
substantial authority for the tax treatment of an item. Id.
We conclude that the corporate petitioners are not liable
for the penalties in dispute. We have agreed with petitioners
that the Prime Plan is not a plan of deferred compensation and
whether the Prime Plan is within the scope of section 419A(f)(6)
is a novel question. Although we decide the latter question in
favor of respondent, we are persuaded that petitioners' position
is supported by a well-reasoned construction of the relevant
statutory provisions. Sec. 1.6662-4(d)(3)(iii), Income Tax Regs.
We decline to uphold respondent's determination of the penalties
against the corporate petitioners in the circumstances herein.
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