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1.6661-3(b)(1), Income Tax Regs. Petitioner cited no case law or
regulations in support of its position. Petitioner has cited as
substantial authority only the advice given by its hired
professionals. Advice of hired professionals, even when reasonable
under the circumstances--and regardless of the form in which it is
rendered--does not constitute substantial authority. Gallade v.
Commissioner, supra at 367; sec. 1.6661-3(b)(2), Income Tax Regs.
Indeed, in light of the facts in this case, the weight of authority
directly supported respondent on the issue of “active conduct of a
trade or business”. Sec. 355(a)(1)(C) and (b). Petitioner did not
have substantial authority for taking a position that the split-off
qualified for nonrecognition of gain under section 355.
Section 6661(c) authorizes the Commissioner to waive “all or any
part of the addition to tax * * * on a showing by the taxpayer that
there was reasonable cause for the understatement (or part thereof)
and that the taxpayer acted in good faith.” While the authority to
waive the section 6661(a) addition to tax rests with the Commissioner
and not with this Court, we review a denial of waiver by the
Commissioner under the abuse of discretion standard. Gallade v.
Commissioner, supra at 367-368; Mailman v. Commissioner, 91 T.C. 1079,
1084 (1988).
We find no evidence in the record that petitioner ever requested
a waiver. Accordingly, as we noted in Alondra Indus., Ltd. v.
Commissioner, T.C. Memo. 1996-32, and Brown v. Commissioner, T.C.
Memo. 1992-15, “we cannot find that respondent abused his discretion
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