- 33 -
the Internal Revenue Code. Cf. Westbrook v. Commissioner, 68
F.3d 868, 880-881 (5th Cir. 1995), affg. per curiam T.C. Memo.
1993-634. Other aspects of their recordkeeping for the show
horse activity were careless, as evidenced by their failure to
record or report their horses’ winnings, and their excess claims
of horse show expenses in both years, including a claim of horse
show expenses in 1993 despite a stipulation that none of their
horses competed in shows that year. A failure to maintain
adequate books and records is evidence of negligence. See sec.
1.6662-3(b)(1), Income Tax Regs.
Petitioners contend that they are not liable for the
accuracy-related penalty under section 6662(a) for either of the
years in issue because they relied on the advice of their
accountant. A taxpayer may demonstrate reasonable cause if he
can show that he relied in good faith on a qualified adviser
after full disclosure of all necessary and relevant information.
See Jackson v. Commissioner, 86 T.C. 492, 539-540 (1986), affd.
864 F.2d 1521 (10th Cir. 1989); Paula Constr. Co. v.
Commissioner, 58 T.C. 1055, 1061 (1972), affd. without published
opinion 474 F.2d 1345 (5th Cir. 1973); sec. 1.6664-4(b)(1) and
(c)(1)(i), Income Tax Regs.
In this case, petitioners have failed to establish that they
fully disclosed all necessary and relevant information to their
accountant, Mr. Adelman. The record in this regard contains only
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