- 11 -
year.9 However, at no time did Mr. Larson, an experienced busi-
nessman, and Ms. Larson attempt to verify the accuracy of the
amount of nonemployee compensation (i.e., $1,892) that they
assumed was shown in Form 1099 which Windermere issued to him for
1999. We believe that petitioners should have attempted to
ascertain why the amount that they assumed Windermere reported in
that form was extremely small when compared to the amount of work
that he performed for Windermere as a nonemployee during 1999.
They did not.10
Based upon our examination of the entire record before us,
we find that petitioners have failed to carry their burden of
establishing that there was reasonable cause for, and that they
acted in good faith with respect to, the underpayment in this
case. On that record, we find further that petitioners have
failed to carry their burden of establishing that they are not
liable for 1999 for the accuracy-related penalty under section
9Moreover, by reporting only $1,892, instead of $21,891.95,
as the amount of nonemployee compensation that Mr. Larson re-
ceived from Windermere during 1999, petitioners failed to report
approximately (1) 23� percent of the total nonemployee and
employee compensation that Windermere paid to Mr. Larson during
that year and (2) 20� percent of the total nonemployee and
employee compensation that all payors paid to Mr. Larson during
that year.
10Nor did petitioners attempt to determine why the amount
that they assumed Windermere reported in Form 1099 issued to Mr.
Larson for 1999 was small when compared to the amount of work
that he performed for Windermere as a nonemployee and an employee
during that year.
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