David Bruce McMahan - Page 8

                                                - 8 -8                                                   
            petitioner consequently could not have relied on Mr. Russell to                           
            file it.  Respondent, however, ignores the fact that the decision                         
            to transfer responsibility was not executed until mid-August.6                            
            Thus, we find respondent's argument unpersuasive on this point.                           


            II. Reliance on an Agent To File Does Not Establish Reasonable                            
            Cause                                                                                     
                  Next we must determine whether petitioner's reliance on Mr.                         
            Russell to file petitioner's extension request constitutes                                
            reasonable cause.  We hold that such reliance does not constitute                         
            reasonable cause.                                                                         
                  A taxpayer who files his return after the deadline cannot                           
            establish reasonable cause by proving that he relied on his                               
            attorney or accountant to file his return.  United States v.                              
            Boyle, 469 U.S. 241, 250 (1985); Estate of La Meres v.                                    
            Commissioner, 98 T.C. 294, 315 (1992); Zabolotny v. Commissioner,                         
            97 T.C. 385, 400 (1991), affd. in part and revd. in part 7 F.3d                           
            774 (8th Cir. 1993); Boatman v. Commissioner, T.C. Memo. 1995-                            
            356.  In Boyle, the leading case on whether reliance on an agent                          
            constitutes reasonable cause, the executor of an estate relied on                         
            an attorney to file the estate's tax return.  The executor's                              
            attorney assured him that the return would be filed "in plenty of                         
            time".  When the executor learned that the return had not been                            
            filed in a timely manner, the executor argued that his reliance                           

            6Petitioner did not rely on OAD to file the extension.                                    




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  Next

Last modified: May 25, 2011