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preparation of a tax return, and a failure to keep adequate books
and records or to substantiate items properly. Sec. 1.6662-
3(b)(1), Income Tax Regs. The term "disregard" includes any
careless, reckless, or intentional disregard of the rules or
regulations. Sec. 6662(c).
Section 6664(c)(1) provides that the penalty under section
6662(a) shall not apply to any portion of an underpayment if it
is shown that there was reasonable cause for the taxpayer's
position with respect to that portion and that the taxpayer acted
in good faith with respect to that portion. Sec. 6664(c)(1).
The determination of whether a taxpayer acted with
reasonable cause and good faith within the meaning of section
6664(c)(1) is made on a case-by-case basis, taking into account
all the pertinent facts and circumstances. Sec. 1.6664-4(b)(1),
Income Tax Regs. The most important factor is the extent of the
taxpayer's efforts to assess the taxpayer's proper tax liability.
Id. Reliance on the advice of a professional (such as an
attorney or an accountant) does not necessarily demonstrate
reasonable cause and good faith. Reliance on professional
advice, however, constitutes reasonable cause and good faith if,
under all the circumstances, such reliance was reasonable and the
taxpayer acted in good faith. Id.
Petitioners did not call their accountant as a witness to
testify about the information petitioners provided him for
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