Estate of Kevin J. Lorenz, Deceased, Elizabeth J. Lorenz, Personal Representative and Elizabeth J. Lorenz - Page 13

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            on the entire underpayment.  He did not say that respondent's                               
            counsel actually knew.                                                                      
                        c.    Respondent's Duty To Inform Petitioners                                   
                  Petitioners contend that respondent should have told them                             
            that the fraud penalty rates applied to the full underpayment                               
            under the basis of settlement.  We disagree.  The fraud penalty                             
            rates apply to the full underpayment because of section 6663(b)                             
            and (c), as discussed at par. A-1 above.  Petitioners had the                               
            advice of counsel and an accountant during the negotiation of the                           
            basis of settlement.  We disagree that respondent had a duty to                             
            inform petitioners of the law applicable to the settlement.                                 
            Stamm Intl. Corp. v. Commissioner, 90 T.C. 315, 320-321 (1988).                             
                  3.    Conclusion                                                                      
                  We conclude that the fraud penalties for Mrs. Lorenz and the                          
            estate of Mr. Lorenz should both be computed based on the entire                            
            B.    Comet's Depreciation                                                                  
                  Petitioners contend that the depreciation deduction for                               
            Comet should be increased by $19,432 for 1989 and $22,863 for                               
            1990 from the amounts stated in the notice of deficiency.                                   
            Petitioners contend that respondent had agreed to this change,                              
            but that, by mutual mistake, this agreement was not read into the                           

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