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Petitioners have not shown, however, that Mr. Stienessen was
aware that Menards placed no substantial restrictions or
limitations on Mr. Menard’s receipt of the interest during TYE
1998. Without knowing what information Mr. Stienessen had when
he prepared petitioners’ returns, we cannot conclude that
petitioners gave him necessary and accurate information for
reporting the interest income.
After concluding that Mr. Stienessen lacked necessary and
accurate information for preparing petitioners’ returns, we need
not decide whether petitioners actually relied in good faith on
Mr. Stienessen’s judgment. Petitioners are liable for the
section 6662(a) accuracy-related penalties for negligence or
disregard of rules or regulations as follows: Menards is liable
with respect to the TMI expenses deduction as disallowed, and Mr.
Menard is liable with respect to the excess TMI expenses
constructive dividend and the constructively received interest
income.
We have considered the remaining arguments of both parties
for results contrary to those expressed herein and, to the extent
not discussed above, find those arguments to be irrelevant, moot,
or without merit.
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