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thought that only one W-2 was correct, as Mr. Pedersen had never
received two W-2's from his company.”3
Respondent contends that nothing other than petitioner’s own
testimony indicates whether his accountant was competent. More
importantly, respondent asserts that petitioner and his
accountant’s assumptions regarding the two Forms W-2 were not
reasonable in light of the fact that neither Form W-2 was marked
revised. Respondent further asserts that the failure of
petitioner and his accountant to contact Altana, Inc., in order
to verify the correct amount of petitioner’s wages reflects a
lack of good faith and reasonable cause. Finally, respondent
points out that, at trial, petitioner admitted that he had not
examined his tax return “closely enough” and that petitioner’s
failure to do so resulted in his failing to report more than 40
percent of his wages on his 2002 tax return.
3 At trial, respondent conceded that the October 2004
letter is contained in respondent’s administrative file.
Petitioner had already raised that letter in his pretrial
memorandum. Nevertheless, when petitioner referred to that
letter at trial, respondent objected to its introduction into
evidence on the basis of hearsay. Noting that this is a small
tax case, the Court observed that section 7463 generally allows
disputes in small tax cases to be decided in proceedings in which
the normally applicable procedural and evidentiary rules are
relaxed. In addition, the Court referenced Rule 174(b), which
provides: “Trials of small tax cases will be conducted as
informally as possible consistent with orderly procedure, and any
evidence deemed by the Court to have probative value shall be
admissible.” The Court then overruled respondent’s objection.
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