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rules or regulations. Negligence is defined as the failure to do
what a reasonable and ordinarily prudent person would do under
the circumstances. Needy v. Commissioner, 85 T.C. 934, 947
(1985). Petitioner has the burden of proof on this issue. Bilby
v. Commissioner, 58 T.C. 757, 791 (1972).
If a taxpayer relies in good faith upon the advice of a
competent and experienced accountant in the preparation of the
taxpayer's return, the addition to tax for negligence or the
intentional disregard of rules or regulations is not applicable.
Sec. 6664(c); WAIS v. Commissioner, 94 T.C. 473, 487 (1990). To
show good faith reliance, the taxpayer must show that the return
preparer was supplied with all the necessary information and the
incorrect return was a result of the preparer's mistakes. Pepsin
v. Commissioner, 59 T.C. 473, 489 (1972).
We cannot conclude, based solely on petitioner's testimony,
that petitioner provided Williams & Tucker with all the necessary
information and substantiating records to prepare an accurate
return. Accordingly, we hold that petitioners are liable for the
penalty under section 6662(a).
To reflect the resolutions of the issues set forth above.
Decision will be
entered under Rule 155.
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Last modified: May 25, 2011