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accountant. The accountant was not called to testify. We
believe it likely that the accountant was aware only of the terms
of the settlement agreement, and not the surrounding
circumstances. Petitioners have in any event failed to show that
there was full disclosure. We accordingly reject their claim of
reasonable cause.
The penalty for the substantial understatement of income tax
is inapplicable if there is or was substantial authority for the
position taken on the return. See sec. 6662(d)(2)(B)(i). A
taxpayer's return position has substantial authority if the
weight of the authority supporting that position is substantial
as compared to the weight of the authority supporting contrary
treatment. See sec. 1.6662-4(d)(3)(i), Income Tax Regs. The
standard is an objective one that is less stringent than the
“more likely than not” standard (more than a 50 percent
likelihood of being upheld), but more stringent than the
“reasonable basis” standard (which if met avoids the negligence
penalty under section 6662(b)(1)). See sec. 1.6662-4(d)(2),
Income Tax Regs. An authority is accorded little weight if it
shares only some of the facts of the tax treatment at issue and
is otherwise materially distinguishable. See sec. 1.6662-
4(d)(3)(ii), Income Tax Regs.
We find that petitioners had substantial authority for
excluding the Lindsey and Halliburton settlement amounts. When
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