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inputs into it. Petitioner has not shown that any of the
conceded issues were anything but the result of his own
negligence or disregard of regulations.9
As to the contested adjustment, this Court has not
previously addressed the issue of whether section 408(g)
precludes recognition of a spouse’s community property interest
in allocating the taxability of an IRA distribution. While we
find the text of section 408(g) to be clear and unambiguous on
its face, we bear in mind that the Commissioner has interpreted
section 408(g) administratively in a manner that is inconsistent
with our holding herein. Under these circumstances, we conclude
that petitioner had a reasonable basis for his return position
that one-half of his IRA distributions were allocable to his
former spouse.10 Accordingly, we hold the negligence accuracy-
9Petitioner has claimed entitlement to an NOL carryback that
may eliminate some or all of the deficiency determined in this
case. The parties have agreed to address this issue in the
context of their Rule 155 computations. Petitioner is liable for
the negligence accuracy-related penalty regardless of whether the
claimed NOL carryback eliminates the deficiency for the year. A
loss in a later year does not reduce the underpayment for
purposes of imposing the penalty. See C.V.L. Corp. v.
Commissioner, 17 T.C. 812, 816 (1951); McCauley v. Commissioner,
T.C. Memo. 1988-431; sec. 1.6664-2(f), Income Tax Regs.; see also
Estate of Trompeter v. Commissioner, 111 T.C. 57, 59-60 (1998),
and the cases cited therein.
10We note that for returns filed on or after Dec. 2, 1998,
respondent’s view is that a return position “reasonably based on
one or more of the authorities set forth in �1.6662-4(d)(3)(iii)
(taking into account the relevance and persuasiveness of the
authorities, and subsequent developments)” will generally satisfy
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