- 41 -
hiring an attorney or accountant does not insulate the taxpayer
from negligence penalties, good faith reliance on professional
advice concerning tax laws is a defense. United States v. Boyle,
469 U.S. 241 (1985); Betson v. Commissioner, 802 F.2d 365, 372
(9th Cir. 1986), affg. in part and revg. in part T.C. Memo. 1984-
264. Reliance on a qualified adviser may demonstrate reasonable
cause and good faith if the evidence shows that the taxpayer
contacted a competent tax adviser and provided the adviser with
all necessary and relevant information. Collins v. Commissioner,
857 F.2d 1383, 1386 (9th Cir. 1988), affg. Dister v. Commis-
sioner, T.C. Memo. 1987-217; Jackson v. Commissioner, 86 T.C.
492, 539-540 (1986), affd. 864 F.2d 1521 (10th Cir. 1989). In
order to prove such reliance, the taxpayer must establish that
the return preparer was supplied with all necessary information,
and the incorrect return was the result of the preparer's mis-
takes. Weis v. Commissioner, 94 T.C. 473, 487 (1990).
Respondent contends that all of the deficiencies were due to
negligence, disregard of the rules or regulations, or a substan-
tial understatement of income tax. Petitioner and EIC provided
evidence of discussions that were held with their accountants
regarding the proper accounting method to be used by them. With
regard to the remaining items, such as the reasonable compensa-
tion, constructive dividends, and numerous concessions by
petitioners, the record is silent as to what information peti-
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