- 23 -
that he is a consultant on establishing and operating trusts.
Chisum is neither an attorney nor an accountant. There is no
evidence that petitioner investigated Chisum’s qualifications. A
taxpayer must make reasonable inquiry as to the legality of a tax
plan, including obtaining independent legal advice, when it is
common knowledge that the plan is questionable. See Neely v.
United States, 775 F.2d at 1095; Hanson v. Commissioner, 696 F.2d
1232, 1234 (9th Cir. 1983), affg. T.C. Memo. 1981-675 (taxpayers
who established family trust that was lacking in economic
substance were negligent in putting their faith in “flagrant tax
avoidance scheme” repeatedly rejected by the courts). Petitioner
negligently disregarded the tax laws. We conclude that
petitioner is liable for accuracy-related penalties for
negligence under section 6662(a) for 1993 and 1994.
To reflect the foregoing,
Decision will be entered
under Rule 155.
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Last modified: May 25, 2011