- 14 - 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, Inc. v. Commissioner, T.C. Memo. 1995- 610; see also Rule 142(a). We have no doubt on the record before us that Daryl Kell, petitioner’s only officer, actually relied in good faith on the certified public accountants who prepared the returns. We note that the 1996 and 1997 returns were prepared by different firms of public accountants.7 Petitioner was justified in its reliance on its advisers. We find credible Mr. Kell’s testimony that he made available all necessary information to the return preparers. In this circumstance, we shall not sustain respondent’s determination of the accuracy-related penalties. Accordingly, Decision will be entered under Rule 155. 7 Respondent argues petitioner did not offer the testimony of its return preparers, Robert Fogleman and Steven McNulty. The failure to introduce the testimony of the return preparers which if true would have been favorable to petitioner, gives rise to the presumption that such testimony would not have been favorable. See Wichita Terminal Elevator Co. v. Commissioner, 6 T.C. 1158, 1165 (1946), affd. 162 F.2d 513 (10th Cir. 1947). Having found Mr. Kell’s testimony in this regard credible, we find the presumption overcome.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011