- 26 -
underpayment for which the taxpayer can show that he acted in
good faith and had reasonable cause. See sec. 6664(c)(1). The
determination of whether a taxpayer acted with reasonable cause
and in good faith is made on a case-by-case basis, taking into
account all the relevant facts and circumstances. See sec.
1.6664-4(b)(1), Income Tax Regs. “Circumstances that may
indicate reasonable cause and good faith include an honest
misunderstanding of fact or law that is reasonable in light of
all of the facts and circumstances, including the experience,
knowledge, and education of the taxpayer.” Id. In addition,
“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.
In determining whether a corporation is liable for the
accuracy-related penalty, the acts of officers on behalf of the
corporation are imputed to the corporation. See O.S.C. &
Associates, Inc. v. Commissioner, T.C. Memo. 1997-300; Ibabao
Med. Corp. v. Commissioner, T.C. Memo. 1988-285. As we have
already held, John did not act in behalf of Simco, so his acts
are not imputed to Simco. Thus, respondent’s determination of
Simco’s negligence or disregard of rules or regulations depends
on a finding of negligence or disregard of rules or regulations
on the part of Neal. As we have also found, John concealed the
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011