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1.6664-4(b)(2), Example (3), Income Tax Regs. Indeed, if Mr.
McKee had compared the first W-2 from Autocar with his final pay
stub from Autocar, he would have known that the W-2 included only
about one-third of his income from Autocar. And, if Mr. McKee
had reviewed his return, he would have been alerted to the fact
that his wages from Autocar were understated for the year. In
short, it simply cannot be said in this case that the error on
petitioners’ return was the result of the preparer’s mistake
based on otherwise complete and correct information provided by
petitioners. See Pessin v. Commissioner, 59 T.C. 473, 489
(1972).
D. Conclusion
Under the circumstances of this case, we are unable to
conclude that petitioners acted with reasonable cause and in good
faith within the meaning of section 6664(c)(1). Accordingly,
petitioners are liable for the accuracy-related penalty under
section 6662(a) as determined by respondent in the notice of
deficiency.
We have considered all of the other arguments made by
petitioners and, to the extent that we have not specifically
addressed them, we find them to be without merit.
Reviewed and adopted as the report of the Small Tax Case
Division.
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