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issued a Notice of Sufficiency to GCI in accordance with its
first application.
The most important factor in determining whether petitioner
acted in a reasonable manner and in good faith is the extent to
which he attempted to determine his proper income tax liability.
Mailman v. Commissioner, supra at 1084. Reliance on the advice
of professionals is tantamount to acting in a reasonable manner
if “under all the circumstances, such reliance [is] reasonable
and the taxpayer acted in good faith.” Sec. 1.6661-6(b), Income
Tax Regs.; see also Vorsheck v. Commissioner, 933 F.2d 757, 759
(9th Cir. 1991); Shelton v. Commissioner, 105 T.C. 114, 125
(1995); Nestle Holdings, Inc. v. Commissioner, supra.
On the basis of these facts, we find that petitioner did act
as an ordinarily prudent person in the circumstances.
Accordingly, his reliance on the advice of his hired
professionals was reasonable and in good faith. Therefore, we
hold that respondent abused her discretion by failing to waive
this penalty. Accordingly, we hold that petitioner is not liable
for the section 6661 addition to tax. See, e.g., Nestle
Holdings, Inc. v. Commissioner, supra (holding that it was
unreasonable in that case to penalize a taxpayer for relying on
the advice of a professional or for not prevailing in this
Court).
Citing Reinke v. Commissioner, 46 F.3d 760, 765 (8th Cir.
1995), affg. T.C. Memo. 1993-197, respondent argues that
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