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instructions; or (6) when they actually received the Schedule K-1
and how long it took them to file their return after receiving
it.
It is well settled that taxpayers must file timely income
tax returns on the basis of the best information available to
them at the time, and they may file amended returns if necessary.
Estate of Vriniotis v. Commissioner, 79 T.C. 298, 311 (1982);
Elec. & Neon, Inc. v. Commissioner, 56 T.C. 1324, 1342-1344
(1971), affd. without published opinion 496 F.2d 876 (5th Cir.
1974); Ruddel v. Commissioner, T.C. Memo. 1996-125. Petitioners
knew approximately what FRC’s income was for 1997, and there is
no reason they could not have used that information to timely
file their 1997 tax return and then file an amended return once
they received the Schedule K-1. Furthermore, petitioners have
not provided us any evidence of when they received the Schedule
K-1. Thus, we are not convinced that they did not have it in
time to file their 1997 return. Even if this was the case, the
fact that petitioners filed their 1997 return on September 1,
1999, over a year after it was due after the extension, suggests
that they did not exercise ordinary business care and prudence to
file their return on time.
Petitioners’ argument that they received legal advice to
exclude the amounts reported on the Schedule K-1 is without
merit. Whether or not petitioners should have excluded the
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