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the addition is 10 percent of the underpayment in cases where the
delinquency persists for more than 15 days.
Petitioners argue that they are not liable for any of the
penalties and additions to tax because they reasonably relied on the
advice of competent tax experts.
If a taxpayer reasonably relies in good faith upon the advice
of a competent tax professional in the preparation of the taxpayer's
return, the penalties and additions to tax such as those in issue in
the instant case may be inapplicable. See United States v. Boyle,
469 U.S. 241, 250-251 (1985) (failure to file); Vorsheck v.
Commissioner, 933 F.2d 757, 759 (9th Cir. 1991) (substantial
understatement); Weis v. Commissioner, 94 T.C. 473, 487 (1990)
(negligence); Housden v. Commissioner, T.C. Memo. 1992-91 (failure
to make deposit of taxes).
The individual petitioners were Canadian citizens unfamiliar
with the U.S. tax system. They sought assistance from a certified
public accountant in the United States in order to comply with the
provisions of the Internal Revenue Code. The accountant for the
individual petitioners and Powertex, Ronald R. Plante, a C.P.A. with
Peat Marwick, testified as to his role in the preparation of
petitioners' tax returns. Mr. Plante had a longstanding
professional association with Powertex and the individual
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