Warren G. Buck and Judith A. Buck - Page 7

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          further addition to tax in an amount equal to 50 percent of the             
          interest payable with respect to the portion of the underpayment            
          that is attributable to negligence or intentional disregard of              
          rules or regulations.                                                       
               Negligence is defined as a lack of due care or failure to do           
          what a reasonable and prudent person would do under similar                 
          circumstances.  Allen v. Commissioner, 925 F.2d 348, 353 (9th               
          Cir. 1991), affg. 92 T.C. 1 (1989).  Under certain circumstances,           
          a taxpayer may avoid the additions to tax for negligence by                 
          showing that he or she reasonably relied on the advice of a                 
          competent professional.  Freytag v. Commissioner, 89 T.C. 849,              
          888 (1987), affd. 904 F.2d 1011 (5th Cir. 1990), affd. 501 U.S.             
          868 (1991).  However, a taxpayer bears the responsibility for any           
          negligent errors of his or her professional adviser.  See Ameri-            
          can Properties, Inc. v. Commissioner, 28 T.C. 1100, 1116-1117               
          (1957), affd. per curiam 262 F.2d 150 (9th Cir. 1958).  Reliance            
          on a professional adviser, standing alone, is not an absolute               
          defense to negligence; it is only one factor to be considered.              
          Freytag v. Commissioner, supra at 888.  In order for reliance on            
          a professional adviser to excuse a taxpayer from the additions to           
          tax for negligence, the taxpayer must establish that the profes-            
          sional adviser on whom he or she relied had the expertise and               
          knowledge of the relevant facts to provide informed advice on the           
          subject matter.  See id.                                                    






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