- 13 -
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
deficiency.
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
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011