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were negligent. Negligence, in the present context, reflects
taxpayers' failure to make reasonable attempts to comply with the
Internal Revenue Code. See sec. 6662(c).
Accuracy-related penalties may be avoided if taxpayers show
that the errors were caused, in some significant part, by
detrimental reliance on the advice of qualified tax professionals
and that their reliance was reasonable and in good faith. See
sec. 6664(c); United States v. Boyle, 469 U.S. 241, 250 (1985);
Stanford v. Commissioner, 152 F.3d 450, 460-461 (5th Cir. 1998),
affg. in part and vacating on this issue 108 T.C. 344 (1997).
Petitioners employed an accountant to prepare their tax
returns for the years in issue. Having considered petitioners'
and the accountant's testimony, we conclude that petitioners
reasonably relied on the accountant to ascertain their tax bases
in the indebtedness of the Corporation. We do not sustain
respondent's imposition of the accuracy-related penalties.
To reflect the foregoing,
Decisions will be entered for
respondent as to the deficiency
amounts and for petitioners as to
the accuracy-related penalties.
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Last modified: May 25, 2011