T.C. Memo. 1999-404
UNITED STATES TAX COURT
EDWARD R. STOLZ II, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 17246-97. Filed December 14, 1999.
Following disallowance by R of amounts deducted as
business expenses, P entered into a stipulation agreeing to
an additional tax of $17,823 for the taxable year 1995. P,
however, challenged R’s determination of an addition to tax
under sec. 6651(a), I.R.C., for failure to timely file, and
an accuracy-related penalty under sec. 6662(a), I.R.C., on
account of negligence and a substantial understatement of
income tax. P contended that any untimeliness and
inaccuracies were excused by his reliance on a certified
public accountant to prepare and file his return.
Held: On the facts, reliance upon a professional tax
adviser does not constitute reasonable cause within the
meaning of sec. 6651(a), I.R.C., for purposes of relieving P
of liability for the delinquency addition to tax.
Held, further, P failed to establish that correct
information was provided to his tax preparer as is necessary
for reliance upon an agent to be deemed reasonable cause
excusing P from liability for the sec. 6662(a), I.R.C.,
accuracy-related penalty.
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