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Generally, if a taxpayer proves good faith and
reasonable reliance upon the advice of a competent and
experienced accountant or attorney in the preparation of
his or her return, the addition to tax for negligence is
inapplicable. Weis v. Commissioner, 94 T.C. 473, 487
(1990); Conlorez Corp. v. Commissioner, 51 T.C. 467, 475
(1968). In order to prove such reliance, the taxpayer must
establish that the return preparer was supplied with all
necessary information and the incorrect return was the
result of the preparer's mistakes. Weis v. Commissioner,
supra.
In this case, there is no evidence that petitioner
received advice from the seller's attorney concerning the
deductions claimed on the subject returns or anything else.
The fact that the subject agreement was prepared by the
seller's attorney and that he may have been a tax attorney
does not establish that petitioners relied upon any advice
from the seller's attorney in claiming the deductions at
issue in this case.
Similarly, we reject petitioners' claim that they
relied upon petitioner's expertise. Petitioners deducted
the subject payments to the seller's assignee on the theory
that the payments were attributable to the seller's
covenant not to compete. Respondent determined that
petitioners are liable for the penalty on the ground that
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