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the amounts of $3,330 and $1,764, respectively. Section 6662(a)
applies in the case of negligence or disregard of rules or
regulations. See sec. 6662(b)(1). “Negligence” includes the
failure to keep adequate books and records. See sec. 1.6662-
3(b), Income Tax Regs. We note that although petitioner did not
keep formal inventories for any of the items he sold except for
fuel, his records were adequate enough to allow the parties to
stipulate his costs of purchases in each of the separate
categories. Moreover, petitioner will be relieved of the penalty
under section 6662(a) if there was reasonable cause for the
underpayment and he acted in good faith. Sec. 6664(c)(1).
Reasonable cause and good faith include “an honest
misunderstanding of fact or law that is reasonable in light of
the experience, knowledge and education of the taxpayer.” Sec.
1.6664-4(b)(1), Income Tax Regs. Further, “Reliance on * * *
professional advice * * * constitutes reasonable cause and good
faith if, under all the circumstances, such reliance was
reasonable and the taxpayer acted in good faith.” Id. We find
that petitioner acted with reasonable cause and in good faith
based on his experience, knowledge and education, and on the fact
that he reasonably relied on an accountant in filing his tax
returns. Therefore, he is not liable for the accuracy-related
penalty under section 6662(a).
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