- 21 -
(viz., Sun Life, A.G. Edwards, and American General) would have
been required to issue Forms 1099 (i.e., by no later than January
31, 2002).
We turn now to petitioner’s claim at trial that she believed
that the respective gross distributions made by Sun Life and A.G.
Edwards during 2001 were death benefits that are not taxable
because some of her widowed friends told her during informal
discussions that death benefits are not taxable. We find that it
was unreasonable for petitioner to rely on any such informal
statements of her friends in concluding that the respective gross
distributions that Sun Life and A.G. Edwards made during 2001 are
not taxable. In determining whether a taxpayer acted with
reasonable cause and in good faith, generally the most important
factor to consider “is the extent of the taxpayer’s effort to
assess the taxpayer’s proper tax liability.” Sec. 1.6664-
4(b)(1), Income Tax Regs. Petitioner should have consulted a
professional, and not her friends, about the tax treatment of the
respective gross distributions that Sun Life and A.G. Edwards
made during 2001.15 The record does not establish, and peti-
15We note that the record does not establish that A.G.
Edwards referred to the respective gross distributions that it
made during 2001 as death benefits. The record shows that such
distributions were from decedent’s IRA and petitioner’s IRA. Nor
does the record establish that American General referred to the
respective distributions that it made during 2001 as death
benefits. The record shows that such distributions were of
interest and other income. Although the record establishes that
(continued...)
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011