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income on their 2001 return and that the $17,995 is self-
employment income.
2. Whether Petitioners Have Shown They Were Not Negligent
Petitioners argue that they were not negligent because they
are correct on the merits of this case and they followed the
Secretary’s regulations and procedures. We disagree. As
discussed above, we conclude that petitioners are incorrect on
the merits of this case. Petitioners did not comply with Rev.
Proc. 87-32, 1987-2 C.B. 396. Petitioners make no argument and
offered no evidence to show that they had reasonable cause. We
conclude that petitioners are liable for the accuracy-related
penalty under section 6662(a) for 1999, 2000, and 2001.
To reflect concessions and the foregoing,
Decisions will be
entered under Rule 155.
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Last modified: May 25, 2011