- 23 -
benefit plans or of payments of insurance premiums and health
care costs.9
Accuracy-Related Penalties and Addition to Tax
Respondent determined that petitioners were liable for
accuracy-related penalties under section 6662(a) for the years in
issue. Petitioners argue that they are not liable for accuracy-
related penalties because they reasonably relied on their
attorney in choosing statutory employee status on their returns.
Reliance on a professional may relieve a taxpayer from the
accuracy-related penalty where the reliance is reasonable. ASAT,
Inc. v. Commissioner, 108 T.C. 147 (1997). On the basis of the
entire record in this case, we find that petitioners’ reliance on
the tax attorney was reasonable. Accordingly, petitioners are
not liable for the accuracy-related penalties for the years in
issue pursuant to section 6662(a).
Respondent also determined that petitioners were liable for
an addition to tax for the year 1990 for failure to file under
section 6651. Petitioners offered no evidence explaining their
failure to timely file their 1990 return. Thus, petitioners are
liable for the addition to tax for the year 1990 under section
6651(a)(1) in an amount to be computed under Rule 155.
9 In Lozon v. Commissioner, T.C. Memo. 1997-250, the same
question arose with respect to contributions to pension and
profit-sharing plans. In that case, we found that the
Commissioner had conceded that the plans in question were
qualified and that, under sec. 83(e)(2), the taxpayers were not
required to include the contributions in income.
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: May 25, 2011