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(9th Cir. 1991); Neely v. Commissioner, 85 T.C. 934, 947 (1985).
The accuracy-related penalty of section 6662 is not applicable to
any portion of an underpayment to the extent that an individual
has reasonable cause for that portion and acts in good faith with
respect thereto. See sec. 6664(c)(1). Such a determination is
made by taking into account all facts and circumstances,
including whether the taxpayer relied on a professional tax
adviser. See sec. 1.6664-4(b)(1), Income Tax Regs. Reliance on
the advice of a tax professional is a defense to the accuracy-
related penalty when the taxpayer establishes: (1) The adviser
had sufficient expertise to justify reliance, (2) the taxpayer
provided necessary and accurate information to the adviser, and
(3) the taxpayer actually relied in good faith on the adviser’s
judgment. See Ellwest Stereo Theatres of Memphis, Inc. v.
Commissioner, T.C. Memo. 1995-610.
On this stipulated record, we conclude petitioner is liable
for the accuracy related penalty. Petitioner conceded several
items in the notice of deficiency, and, as to the conceded items,
there is no evidence that reasonable cause existed or that
petitioner was not negligent. As to the deduction for the
litigation costs attributable to the individual claimants, no
reasonable cause existed and there is no evidence petitioner was
not negligent. While the parties stipulated "Mr. Bailin's
clients relied upon him to properly prepare their returns," the
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