- 23 -
taxpayer was reasonable and the taxpayer acted in good faith.
Id.
Based on the record, we conclude that petitioner is not
liable for the section 6662 accuracy-related penalty on the
portion of the underpayment related to the Solomons house.
Petitioner retained Sherwood to prepare his 1989 return and both
petitioner's and Sherwood's testimony indicated that petitioner
provided Sherwood with all of the information regarding the
Solomons house. Although petitioner's reliance on Sherwood in
this regard was misplaced, we do not conclude that petitioner's
reliance on Sherwood was unreasonable.
Petitioner has not shown reasonable cause or good faith for
the remainder of the underpayment. Neither petitioner nor
Sherwood testified as to what information petitioner provided to
Sherwood regarding Allied's payment of petitioner's personal
expenses. Thus, the section 6662(a) penalty will be sustained as
to the remaining portion of the underpayment for 1989.
To reflect the foregoing and concessions of the parties,
Decisions will be entered
under Rule 155.
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