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reimbursed petitioner for his expenses and for purchasing
equipment. Furthermore, it is unlikely that petitioner received
$10,000 more than Mr. Burgess. We conclude that petitioner
received $30,000 ($600 per week x 50 weeks) of gross income in
1999 from Treu Air.
With respect to the accuracy-related penalty, we sustain
respondent.3 Section 6662(a) provides that “there shall be added
to the tax an amount equal to 20 percent of the portion of the
underpayment to which this section applies.” Section 6662(b)
applies the section to underpayments due to negligence.
Negligence includes the failure to make a reasonable attempt to
comply with the tax laws and to keep adequate books and records.
Sec. 6662(c); sec. 1.6662-3(b)(1), Income Tax Regs. Petitioner
was well aware that he had received gross income from Treu Air.
Moreover, he had received the Form 1099-MISC. While it may be
that he was unsure of the correct amount of income, he failed to
take any action to determine that amount, and he simply reported
no income. Negligence is strongly indicated where a taxpayer
fails to include in income the amount shown on an information
return. Sec. 1.6662-3(b)(1)(i), Income Tax Regs. At best, his
failure to report the income from Treu Air was negligent.
3 Respondent has satisfied his burden of production under sec.
7491(c).
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