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Petitioner never received any Forms 1099 for 2000 from First
Albany pertaining to the education accounts. It was not
unreasonable for petitioner to assume that there were no Forms
1099 issued for 2000 for which he would be responsible for
reporting on his 2000 return because, after making repeated
requests, he never received any Forms 1099 from either his former
spouse or First Albany. In addition, it was not unreasonable for
petitioner to assume that a trust had been established pursuant
to the property settlement and separation agreement, and that, if
there was any income, the trust would have been responsible for
reporting that income on the trust’s income tax return.
Upon a review of the record, we find that petitioner had
reasonable cause to believe that there were no Forms 1099
pertaining to him, and that he acted in good faith with respect
to the understatement attributable to the income reported on
those forms.
Conclusion
In view of the foregoing, we hold that petitioner is not
liable for the accuracy-related penalty pursuant to section 6662.
We have considered all of the arguments made by respondent,
and, to the extent that we have not specifically addressed those
arguments, we conclude that they are unconvincing.
Reviewed and adopted as the report of the Small Tax Case
Division.
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