- 18 -
or on the advice of a professional (such as an ap-
praiser, an attorney, or an accountant) would not
necessarily constitute a showing of reasonable cause
and good faith. Similarly, reliance on facts that,
unknown to the taxpayer, are incorrect would not neces-
sarily constitute a showing of reasonable cause and
good faith. Reliance on an information return, profes-
sional advice, or other facts, however, would consti-
tute a showing of reasonable cause and good faith if,
under all the circumstances, such reliance was reason-
able and the taxpayer acted in good faith. * * * [Sec.
1.6661-6(b), Income Tax Regs.]
Section 6661(c) does not state that the taxpayer's proof of
reasonable cause and good faith will excuse the taxpayer from
being held liable for the addition to tax imposed by that provi-
sion. Rather, that section provides that respondent may waive
imposition of that addition to tax in cases in which she deter-
mines that the taxpayer's failure was due to reasonable cause and
was premised on good faith.
Petitioners have not established that they submitted to
respondent information relating to their reliance on their
adviser Mr. Amsterdam that would show that there was reasonable
cause for their understatement of tax for 1983 and that they
acted in good faith. However, assuming arguendo that petitioners
requested a waiver under section 6661(c) that respondent refused
to grant, the standard for review of respondent's decision not to
grant any such request is whether respondent abused her discre-
tion. Mailman v. Commissioner, 91 T.C. 1079, 1084 (1988).
We have found that petitioners failed to prove that they
acted reasonably in claiming a loss and an investment tax credit
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011