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percent of the tax required to be shown on the return or $5,000.
The Court concludes that respondent has produced sufficient
evidence to show that the accuracy-related penalty under section
6662 is appropriate.
The settlement agreement advised petitioner that the
payments were going to be made as “other income” and reported on
a Form 1099. Petitioner’s income tax return for 2002 was
prepared by a paid preparer, but there is no evidence that
petitioner revealed to him the facts concerning her settlement
payments. Petitioner has not shown that her failure to report
the payments from Associates as income was an action taken with
reasonable cause and in good faith. Respondent’s determination
of an accuracy-related penalty under section 6662(a) is
sustained.
To reflect the foregoing,
Decision will be entered
for respondent.
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Last modified: November 10, 2007