Edward R. Stolz II - Page 1

                                 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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