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the Chevrolet debt because they had substantial authority for
their position and that they were entitled to relief under
section 6664. Respondent anticipated these arguments in his
opening and reply briefs. Although we could treat Henry and
Esther’s failure to address the accuracy-related penalties in
their opening brief as a concession or abandonment of the issue,
we decline to do so under these circumstances. See Rule
151(e)(5); Lencke v. Commissioner, T.C. Memo. 1997-284. Instead,
we shall consider the arguments made by Henry and Esther with
respect to the disputed payments.
Henry and Esther argue that their reporting position
regarding the FirsTier and Chevrolet payments was made on a bona
fide factual belief that they were not the primary obligors of
the FirsTier note or the Chevrolet debt and, therefore, were not
obligated to report as their income the payments made by HJA on
the two liabilities. Henry and Esther also argue that respondent
has not directed the Court’s attention to any rule, regulation,
or case law that required Henry and Esther to declare the
payments as income. They assert that there is significant case
law in support of their reporting position; therefore, they had a
reasonable basis for their view, and they should not be liable
for the accuracy-related penalties.
Henry and Esther did not have substantial authority for
their positions. See sec. 6662(d)(2)(B)(ii). Although they rely
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