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preparer’s mistakes, and (3) that the taxpayer was relying in
good faith on the advice of a competent return preparer. See
Westbrook v. Commissioner, 68 F.3d. 868, 881 (5th Cir. 1995),
affg. T.C. Memo. 1993-634; Cramer v. Commissioner, 101 T.C. 225,
251 (1993), affd. 64 F.3d 1406 (9th Cir. 1995). Petitioner
testified in general terms that he described the substance of the
sale of the shares to Melvin, but petitioners have not shown that
they provided Melvin with complete and accurate information or
that the incorrect return resulted from Melvin’s mistakes.
Melvin did not testify.
The taxpayers in Streber v. Commissioner, supra, were about
20 and 25 years old and lacked business experience when they each
received an inheritance of more than $1 million. They hired a
lawyer to advise them of their potential tax liability. They
followed the advice of the lawyer. Petitioner is not like the
taxpayers in Streber because he is a lawyer, and he negotiated
the agreement at issue.
The taxpayer in Reser v. Commissioner, supra, was not
personally involved with the transaction which caused the
deficiency. See id. at 1268. In contrast, petitioner personally
negotiated the terms of the agreement in the instant case. The
tax issue in Reser was a complex basis computation for which the
taxpayer had no special knowledge. See id. In contrast, the
issue of how much the parties allocated to PAYS’ covenant not to
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