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case--whether petitioner was an employee of RHB for purposes of
the income tax provisions of the Internal Revenue Code. Neither
authority has any bearing on this case.
9. Conclusion
Despite petitioners’ emphasis on petitioner’s independent
fiduciary obligations, the record overwhelmingly supports a
finding that petitioner was an employee of RHB. The legal fees
arose from a lawsuit petitioner instituted in response to his
termination by RHB. Because the legal fees were directly
attributable to petitioner’s employment and termination,
petitioners may not deduct the legal fees from their adjusted
gross income under section 62(a)(1). Instead, the legal fees
must be treated as a miscellaneous itemized deduction pursuant to
section 67. As a result, we sustain respondent’s determination
and find a deficiency in petitioners’ 2001 Federal income tax of
$24,185.
B. Accuracy-Related Penalty Under Section 6662(a)
Respondent determined petitioners are liable for an
accuracy-related penalty under section 6662(a) of $4,837.
Petitioners argue they are not liable for an accuracy-related
penalty because they had substantial authority and a reasonable
basis for their position and they reasonably relied upon the
advice of a tax professional; and because they are already
subject to AMT, it would be unfair to penalize them further.
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