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1099-MISC for the earnings during the training period. Thus,
petitioners could have reasonably concluded the Form W-2 reported
the entire earnings from MetLife in 2002. It is arguable that
petitioners should have noticed their gross income was
understated by $6,005. However, petitioners believed that a
significant portion of this amount was reimbursement for office
expenses and, therefore, excludable from gross income. The facts
present a close question, but viewing the record as a whole, we
conclude that petitioners have demonstrated reasonable cause for
failing to report the self-employment income and that they acted
in good faith. See sec. 6664(c). Accordingly, they are not
liable for the accuracy-related penalty with respect to this
adjustment.
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