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Petitioners’ accountant had been preparing their returns for
approximately 19 years including preparing the return at issue.
When petitioners signed the closing agreement in 1998, they
provided a copy to their accountant. A review of petitioners’
2000 return reveals that petitioners submitted to their
accountant all the information necessary for their accountant to
provide tax advice and prepare the return. In particular,
petitioners sought advice from their accountant whether they were
entitled to any exclusions. Unsure as to their entitlement,
petitioners paid their accountant to research these specific
issues. After such research, petitioners’ accountant concluded
that they were so entitled and prepared the returns excluding
income under sections 119 and 912 from petitioners’ gross income.
Therefore, we find that petitioners reasonably and in good faith
relied on the advice of their accountant. Accordingly, we hold
that petitioners were not negligent in relying on their
accountant and thus are not liable for the accuracy-related
penalty under section 6662(a).
Conclusion
We have considered all of the other arguments made by the
parties, and, to the extent that we have not specifically
addressed them, we conclude that they are without merit.
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