Richard A. Brunsman - Page 5

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          importantly, the extent to which the taxpayer attempted to assess           
          the proper tax liability.  See Neely v. Commissioner, 85 T.C. 934           
          (1985); Stubblefield v. Commissioner, T.C. Memo. 1996-537; sec.             
          1.6664-4(b)(1), Income Tax Regs.                                            
               Petitioner argues that he had reasonable cause for the                 
          failure to report the compensation from Czarnowski because he did           
          not receive the Form 1099-MISC, the receipt of which would have             
          “notified him of the believed inaccuracy and afforded him the               
          opportunity to act in accordance with such.”  Petitioner held two           
          jobs in 1999, but he reported only the wages he received from               
          Sparks-Piper.  Petitioner did not need to receive a Form 1099-              
          MISC to be alerted to the fact that he received compensation from           
          Czarnowski for his services.                                                
               Alternatively, petitioner claims there is substantial                  
          authority that he was an employee, and not an independent                   
          contractor, of Czarnowski.  Section 6662(d)(2)(B)(i) provides               
          that “The amount of the understatement * * * shall be reduced by            
          that portion of the understatement which is attributable to * * *           
          the tax treatment of any item by the taxpayer if there is or was            
          substantial authority for such treatment”.  Respondent has                  
          conceded that petitioner was an employee of Czarnowski.                     

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