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circumstances, respondent should have regarded the Forms 1099-G
with skepticism.
In addition, the Forms 1099-G showed the payor as the FDIC
in combination with different financial institutions having
different EINs, notwithstanding the fact that each Form 1099-G
reported exactly the same amount of income. Again, respondent
should have regarded such forms with skepticism.
Moreover, two of the four Forms 1099-G were "corrected"
forms. At the very least, this fact constituted evidence of a
duplication, and respondent should have regarded the Forms 1099-G
with skepticism.
We also think that respondent should have taken into account
the identity of the issuer of the Forms 1099-G and the character
of the "income" reported therein. First, box 5 of Form 1099-G
was used to report discharge of indebtedness by a Federal
government agency. There is nothing in the record to suggest why
respondent, the Commissioner of Internal Revenue, could not have
contacted the Federal government agency that issued the Forms
1099-G in order to determine the basis on which such forms were
issued given the dubious nature of such forms.
Second, section 108(a)(1) excludes from gross income an
amount otherwise includable therein if the discharge of
indebtedness occurs in a bankruptcy case or when the taxpayer is
insolvent. Indeed, the "Instructions for Recipient" for box 5 of
Form 1099-G expressly acknowledged this provision. Again, there
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