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and negligence penalties in section 6662(a) and (b). Section
1.6664-4, Income Tax Regs., states:
Reasonable cause and good faith exception to section
6662 penalties.--(a) In general. No penalty may be
imposed under section 6662 with respect to an portion
of an underpayment upon a showing by the taxpayer that
there was reasonable cause for, and the taxpayer acted
in good faith with respect to, such portion. * * *
(b) Facts and circumstances taken into account.--
(1) In general. The determination of whether a
taxpayer acted with reasonable cause and in good faith
is made on a case-by-case basis, taking into account
all pertinent facts and circumstances. The most
important factor is the extent of the taxpayer's effort
to assess the taxpayer's proper liability. * * *
Reliance on * * * the advice of a professional (such as
an appraiser, attorney or accountant) does not
necessarily demonstrate reasonable cause and good
faith. Similarly, reasonable cause and good faith is
not necessarily indicated by reliance on facts that,
unknown to the taxpayer, are incorrect. * * *
As a general rule, the responsibility of filing an accurate
return cannot be shifted by the taxpayer to a return preparer.
Metra Chem Corp. v. Commissioner, 88 T.C. 654, 662 (1987).
However, under certain circumstances, the taxpayer has been able
to avoid the imposition of a penalty if there was good faith
reliance by the taxpayer on the advice of a competent adviser.
Jackson v. Commissioner, 86 T.C. 492, 539-540 (1986), affd. 864
F.2d 1521 (10th Cir. 1989). To show good faith reliance on the
advice of a competent adviser, the taxpayer must at least
establish: (1) That he or she provided the return preparer with
complete and accurate information; (2) that an incorrect return
was a result of the preparer's mistakes; and (3) that the
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