- 41 -
circumstances. Rybak v. Commissioner, 91 T.C. 524, 565 (1988);
Neely v. Commissioner, 85 T.C. 934, 947 (1985).
We find that the underpayment was not due to negligence or
disregard of rules or regulations. Petitioner has limited
knowledge concerning Federal income taxes, and relied primarily
on professional tax advisers and his partner in Coastal, who is a
certified public accountant charged with its financial
management, in preparing his 1988 tax return and disclosing the
transaction at issue. Respondent relies on Jaques v.
Commissioner, 935 F.2d 104 (6th Cir. 1991), affg. T.C. Memo.
1989-673, maintaining that petitioner failed to establish what
information was given to his accountant. In order for reliance
on professional advice to excuse a taxpayer from the negligence
additions to tax, the reliance must be reasonable, in good faith,
and based upon full disclosure. Freytag v. Commissioner, 89 T.C.
849, 888 (1987), affd. 904 F.2d 1011 (5th Cir. 1990), affd. 501
U.S. 868 (1991). We are satisfied that petitioners have met
their burden of proof on each of these factors.
Petitioners attached Form 8082 to their tax return,
disclosing petitioner's treatment of the transaction at issue as
being different from the way in which Pecaris treated the
transaction. Although we disagree with the way in which the
transaction was treated by petitioner for tax purposes,
petitioners' Form 8082 disclosure convinces us that petitioner
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