- 11 -
The determination of whether petitioners engaged in their
antique glassware sales activity for profit involves a difficult
factual question. See, e.g., Cavalaris v. Commissioner, T.C.
Memo. 1996-308. Petitioners substantiated all of the claimed
expenses and employed an accountant to prepare their tax returns
and advise them. Nothing in the record suggests that their
reliance on Mr. Myers was less than reasonable, particularly
considering petitioners' lack of prior business experience and
educational backgrounds.5 Accordingly, we find that petitioners
acted with reasonable cause and in good faith, and, therefore,
the penalties do not apply.
Decision will be entered for
respondent with respect to the
deficiencies, and decision will
be entered for petitioners with
respect to the penalties under
section 6662(a).
5 While Mr. Holowinski did obtain his undergraduate degree in
business administration, he did so many years prior to those in
issue. His work experience did not focus on business or
financial skills, and he does not appear to have any special
training in accounting or tax matters.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11
Last modified: May 25, 2011