- 40 -
on Landreth v. Commissioner, 50 T.C. 803 (1968), Payne v.
Commissioner, T.C. Memo. 1998-227, and Whitmer v. Commissioner,
T.C. Memo. 1996-83, as substantial authority for their reporting
position, their position is not supported by any well-reasoned
construction of the relevant authorities. The cases cited on
brief are readily distinguishable and, to the extent they are
pertinent, actually undermine Henry and Esther’s argument. See
Estate of Reinke v. Commissioner, 46 F.3d 760, 765 (8th Cir.
1995), affg. T.C. Memo. 1993-197; Antonides v. Commissioner, 91
T.C. 686, 702-703 (1988), affd. 893 F.2d 656 (4th Cir. 1990). We
have rejected the factual basis of Henry and Esther’s claim that
they were accommodation parties, and, thus, the authority they
cite holding that a guarantor does not realize income when the
underlying debt is paid is not substantial authority for purposes
of section 6662.
The only other argument made by Henry and Esther in support
of their position that they should be relieved of any penalty
under section 6662 is that they had reasonable cause for their
reporting position and that they acted in good faith. See sec.
6664(c).22 The determination of whether a taxpayer acted with
22Although Henry and Esther made disclosures that they had
omitted the payments from their 1992 and 1996 returns, they have
not asserted or argued that the disclosures were adequate
disclosures. See Cramer v. Commissioner, 101 T.C. 225, 255
(1993), affd. 64 F.3d 1406 (9th Cir. 1995); sec. 1.6661-4(b)(3),
Income Tax Regs. Even after respondent, anticipating an adequate
(continued...)
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