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their return position. Prior to Robinson, we believe petitioners
at least had substantial authority for their position that the
express language in the settlement agreements controlled.
Accordingly, for purposes of the substantial understatement
penalty, the amount of any understatement is reduced by that
portion of the understatement attributable to the exclusion of
the Lindsey and Halliburton settlement payments. As the
substantial authority standard of proof is more stringent than
that of reasonable basis, see sec. 1.6662-4(d)(2), Income Tax
Regs., we also find petitioners were not negligent with respect
to the underpayment attributable to the exclusion of the
settlement payments.
Decision will be entered
under Rule 155.
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