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however, have not shown what, if anything, they did to discern
the authority on which they relied to justify the exclusion of
the settlement proceeds from gross income or to determine the
correct effective date of the amendments to section 104(a)(2).
They have not identified any tax professionals that they
consulted or on whom they relied. Because petitioners have not
shown reasonable cause or good faith for their failure to include
the settlement proceeds in gross income, the penalty determined
by respondent is sustained.
To reflect the foregoing and the concession of petitioners,
Decision will be entered
for respondent.
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Last modified: May 25, 2011