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an understatement of tax is substantial if it exceeds the greater
of 10 percent of the tax required to be shown in the return or
$5,000. Sec. 6662(d)(1)(A). An understatement of tax is equal
to the amount of tax required to be shown in the return less the
amount shown therein. Sec. 6662(d)(2)(A).
The accuracy-related penalty under section 6662(a) does not
apply to any portion of an underpayment if it is shown that there
was reasonable cause for such portion and that the taxpayer acted
in good faith. Sec. 6664(c)(1). The determination of whether a
taxpayer acted with reasonable cause and in good faith depends
upon the pertinent facts and circumstances, including the tax-
payer's efforts to assess his or her proper tax liability, the
knowledge and experience of the taxpayer, and reliance on the
advice of a professional, such as an accountant. Sec.
1.6664-4(b)(1), Income Tax Regs.
Petitioner contends that he is not liable for any of the
years at issue for the accuracy-related penalty under section
6662(a) because he relied on the advice of his accountant, Mr.
McVeigh, for the preparation of his returns for those years.33
Respondent disagrees.
A taxpayer generally cannot avoid the duty of filing an
accurate return by placing that responsibility on an agent.
33 Petitioner does not rely on sec. 6662(d)(2)(B) in order to
reduce the underpayment for each of the years at issue that
respondent determined is attributable to a substantial
understatement of income tax.
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