- 40 -
shown in the return or $5,000 ($10,000 for corporations).
Sec. 6662(d)(1)(A) and (B).
The accuracy-related penalty does not apply with respect to
any portion of the underpayment if it is shown that there was
reasonable cause for such portion and that the taxpayer acted in
good faith. Sec. 6664(c)(1). The determination of whether a
taxpayer acted with reasonable cause and in good faith depends
upon the pertinent facts and circumstances, including the tax-
payer's efforts to assess his or her proper tax liability, the
knowledge and experience of the taxpayer, and reliance on the
advice of a professional, such as an accountant. Sec.
1.6664-4(b)(1), Income Tax Regs.
Petitioners contend that the accuracy-related penalties are
inappropriate in these cases because they relied on certified
public accountants to prepare their Federal income tax returns
accurately.9 Such reliance, petitioners claim, is evidence that
they acted with reasonable cause and in good faith. Respondent
disagrees.
Generally, the duty of filing accurate returns cannot be
avoided by placing the responsibility on a tax return preparer.
Metra Chem Corp. v. Commissioner, 88 T.C. 654, 662 (1987). While
9 Petitioners' 1989 tax returns were prepared by B.D.O.
Seidman. Petitioners' 1990-1992 tax returns were prepared by
Arthur Andersen & Co.
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