Ellwest Stereo Theatres of Memphis, Inc., et al. - Page 13

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            noncompliance reasonable, however.  Edgar v. Commissioner,                                     
            56 T.C. 717, 762-763 (1971); Smith v. Commissioner, T.C. Memo.                                 
            1993-203.  Even if we grant that the reporting and withholding                                 
            obligations involved in these cases are relatively complicated,                                
            petitioners have not demonstrated that this complexity was                                     
            responsible for their failure to comply.  No contemporaneous                                   
            corporate documents were offered as evidence; no corporate                                     
            officers were called to testify.  Petitioners have not persuaded                               
            us that they were not in fact aware of their obligations.  They                                
            have not satisfied their burden.                                                               
                  2.  Reliance on Professionals                                                            
                  Petitioners argue that because of their lack of                                          
            sophistication, they relied on their accounting service to ensure                              
            tax compliance.  Their accounting service failed to do its job                                 
            properly.  Nevertheless, in their view this reliance was                                       
            consistent with ordinary business care and prudence under the                                  
                  The responsibility to file returns and pay tax when due                                  
            rests upon the taxpayer and cannot be delegated; in general, the                               
            taxpayer must bear the consequences of any negligent errors                                    
            committed by its agent.  Logan Lumber Co. v. Commissioner,                                     
            365 F.2d 846, 854 (5th Cir. 1966); Pritchett v. Commissioner,                                  
            63 T.C. 149, 173-175 (1974); Abernathy v. Commissioner, T.C.                                   
            Memo. 1992-237.  There is a well-recognized, albeit narrow,                                    
            exception to this rule.  When the taxpayer selects a competent                                 

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