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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.
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