-62-
if it is shown that there was a reasonable cause for such
position and that the taxpayer acted in good faith with respect
to such position.
Under section 1.6664-4(b)(1), Income Tax Regs., the most
important factor in determining whether a taxpayer has acted with
reasonable cause and good faith is the extent of the taxpayer's
effort to assess the taxpayer's proper tax liability.
Circumstances that may indicate reasonable cause and good faith
include an honest misunderstanding of fact or law that is
reasonable in light of the experience, knowledge, and education
of the taxpayer. Id.
We have already found that the positions taken on the return
filed by Jack, an experienced attorney in tax matters, have no
support in fact or law. Nor can we find that the positions taken
on the return are the result of an honest misunderstanding of
fact or law that is reasonable in light of the experience,
knowledge and education of the taxpayer. Thus, considering all
the facts and circumstances, we do not find that petitioner acted
with reasonable cause and in good faith.
Petitioner asserts in the alternative, that the accuracy-
related penalty should not be imposed because it disclosed its
positions on the return.
No penalty under section 6662(b)(1) may be imposed on any
portion of an underpayment that is attributable to negligence if
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