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prepared petitioners' joint Federal income tax return for the
1985 tax year. Additionally, petitioners had John P. Schneider,
a certified public accountant, prepare their joint Federal income
tax return for the 1986 tax year. We also note that at the time
petitioners made their investment, as our subsequent discussion
in respect of the addition to tax under section 6661 reveals,
most of the pertinent decisions had not been handed down so that
there was at best a shortage of authority setting forth legal
principles governing the tax consequences arising from the at-
risk provisions of section 465.5
We think the foregoing circumstances meet the standard
established in United States v. Boyle, supra at 251, where the
Supreme Court stated: “When an accountant or attorney advises a
taxpayer on a matter of tax law, such as whether a liability
exists, it is reasonable for the taxpayer to rely on that
advice.”
We conclude that petitioners made a reasonable effort to
obtain, and in fact received, appropriate advice in respect of
petitioner's investment, and therefore they were not negligent
within the meaning of section 6653(a).
Section 6661(a) (Substantial Understatement)
Respondent has asserted additions to tax under section
6661(a) for substantial understatement.
5 See discussion in Andrews v. Commissioner, T.C. Memo.
1985-380 (no negligence under sec. 6653(a) because the fact that
a type of transaction was disapproved by courts not clear at the
time taxpayers entered into transaction).
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