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for the purpose of this penalty. However, no penalty will apply
"with respect to any portion of an underpayment if it is shown
that there was a reasonable cause for such portion and that the
taxpayer acted in good faith with respect to such portion." Sec.
6664(c). Respondent has determined the entire amount of
petitioner's deficiency for the taxable year ended July 31, 1990,
was due to negligence.
Petitioner has provided no evidence of its efforts to comply
with the applicable internal revenue laws other than (1) it used
a bookkeeping service to prepare its Federal income tax returns,
and (2) it made available its check stubs, bank statements, and
other paperwork to that service. Use of an accountant alone does
not constitute reasonable reliance on that professional's advice.
Ma-Tran Corp. v. Commissioner, 70 T.C. 158 (1978). The taxpayer
must establish that the correct information was provided to the
accountant and that the items incorrectly claimed or reported in
the return were the result of the accountant's error. Id. at
173; Enoch v. Commissioner, 57 T.C. 781, 803 (1972).
Petitioner's deficiencies stemmed from several sources:
filing separate returns for No. 2, inclusion of $88,181 of gross
receipts in an incorrect taxable year, and improper depreciation
and rental expense deductions. As to the improper depreciation
claimed on the Chrysler New Yorker automobile and the boat each
year, the excessive rental expense deductions each year, and the
$88,181 gross receipts issue for 1990, petitioner has not
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