- 39 -- 39 -
which depended upon a purportedly technologically unique machine.
Becker, who is experienced in tax matters, explains that he made
an investigation within the limits of his resources and abilities
and fully disclosed what he had done. The question here is
whether petitioners actually and reasonably relied on the
accountant with respect to valuation problems requiring expertise
in engineering and plastics technology, or whether the accountant
gave the tax advice, facilitated the transaction, but did not
make a full and independent investigation of the relevant
business and technology, and did clearly inform his clients of
the limits of his knowledge and investigation of the transaction.
For reasons set forth below, we believe the latter statement more
accurately describes what happened here.
a. The Circumstances Under Which a Taxpayer
May Avoid Liability Under Section 6653(a)(1)
and (2) Because of Reasonable Reliance on
Competent and Fully Informed Professional
Advice
A taxpayer may avoid liability for the additions to tax
under section 6653(a)(1) and (2), and the former section 6653(a),
if he or she reasonably relied on competent professional advice.
United States v. Boyle, 469 U.S. 241, 250-251 (1985); Freytag v.
Commissioner, 89 T.C. 849, 888 (1987), affd. 904 F.2d 1011 (5th
Cir. 1990), affd. 501 U.S. 868 (1991). Reliance on professional
advice, standing alone, is not an absolute defense to negligence,
but rather a factor to be considered. Freytag v. Commissioner,
supra. For reliance on professional advice to excuse a taxpayer
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