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accountant. In other words, petitioners failed to provide their
accountant with sufficient information to render a fully informed
opinion concerning the relevant facts and law. See United States
v. Boyle, supra; Freytag v. Commissioner, supra. Moreover, blind
reliance on another for the accuracy of a return is generally
insufficient to avoid liability for negligence additions to tax.
See Bailey v. Commissioner, 21 T.C. 678, 687 (1954). Here, it
was not reasonable to rely on Douglas’ conclusion because he was
not fully informed by petitioners.
Henry contends that he reasonably believed that the stock
option proceeds were long-term capital gain, for the following
reasons: (1) Because of IMED's section 83(b) program; (2) the
fair market value of the stock options was entered as zero in the
election that Henry signed; (3) IMED provided Henry with a letter
that stated that the election "is necessary to provide for
capital gain treatment upon ultimate stock sale"; (4) Hendrickson
informed Henry that the election was necessary to obtain long-
term capital gain treatment; (5) Henry was informed that the
option proceeds were long-term capital gain by both Cramer and
Monaghan; (6) subsequent to IMED's sale, Henry did not possess
Forms W-2 or 1099 that reflected the stock option proceeds as
income.
Although there were many self-serving assertions that
capital gains were the proper treatment, the record supports our
finding that petitioners were aware that the stock option
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