- 13 -
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
circumstances.
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
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011