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income understated in the badly printed 1099. (Exhibit
“B”)
In April of 2000, when it came time to prepare
1999 tax returns, the Larsons were having work done on
their home and were living in a small cottage owned by
friends who were out of town. Larson constructed his
return with limited access to his records by pulling
relevant documents together, inputting them into a
computer Excel program and summarizing them. Where
possible or relevant, he compared all numbers to prior
year numbers. This is useful for checking several of
the items in the return, but since income varied widely
from 1998 to 1999, it was not useful for the line item
in question. The Form 1099 from Windermere (Exhibit
“A”) has the amount of $1891 clearly typed on it. It
was only apparent in retrospect, that there was a 2
overtyped on the Bold preprinted $ sign. The actual
amount paid to him as a consultant was $21891, before
he was converted to an employee of Windermere. Since
the IRS obtains this data in electronic format instead
of print, they had the advantage of receiving a clear
number, where Mr. Larson did not.
* * * * * * *
Mr. Larson used reasonable care in saving all his
tax documents to prepare his statement, entered them
into a computer program to eliminate math errors, took
the precaution to compare to prior years, then used
that program to complete his tax forms. Due to the
irregular nature of his earnings and their timing,
theses mistakes were not easily discernable. [Repro-
duced literally.]
Before turning to petitioners’ position that under section
6664(c)(1) the Court should not hold them liable for the
accuracy-related penalty, we note that substantially all of the
above-quoted factual allegations, including the alleged details
surrounding Mr. Larson’s work history with respect to Windermere,
petitioners’ living arrangements during April 2000, and Mr.
Larson’s preparation of the 1999 joint return, are not supported
by the record in this case, and we shall not rely on them to
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