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that interest and to enjoy the benefit of that income when it was
paid to her by Parker Development. One of the general principles
of tax law is that income is taxed “to those who earn or
otherwise create the right to receive it and enjoy the benefit of
it when paid.” Helvering v. Horst, 311 U.S. 112, 119 (1940).
This general principle dictates that the gain that was recognized
on the sale of petitioner’s interest in the Happy Valley property
was taxable to her. Consequently, no effect can be given to an
agreement between petitioner and Mr. Walker as to how the gain on
the sale of her interest in the Happy Valley property was going
to be reported on her 1997 and 1998 returns. See Pesch v.
Commissioner, 78 T.C. 100, 129 (1982); Neeman v. Commissioner, 13
T.C. 397, 399 (1949), affd. per curiam 200 F.2d 560 (2d Cir.
1952); Estate of Ballantyne v. Commissioner, T.C. Memo. 2002-160,
affd. sub nom. Ballantyne v. Commissioner, 341 F.3d 802 (8th Cir.
2003); Bonner v. Commissioner, T.C. Memo. 1979-435.
Section 6662 Accuracy-Related Penalty
Respondent determined accuracy-related penalties under
section 6662(a). Under section 6662(a), a taxpayer may be liable
for a penalty of 20 percent on the portion of an underpayment of
tax due to, inter alia, negligence or disregard of the rules or
regulations. Sec. 6662(b)(1). The term “negligence” includes
any failure to make a reasonable attempt to comply with the
provisions of the internal revenue laws or to exercise ordinary
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