Madeline A. Coblenz and William J. Mason - Page 23

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          proper tax liability, including the taxpayer’s reasonable and               
          good-faith reliance on the advice of a professional such as an              
          accountant.  See id.  Further, an honest misunderstanding of fact           
          or law that is reasonable in light of the experience, knowledge,            
          and education of the taxpayer may indicate reasonable cause and             
          good-faith.  See Remy v. Commissioner, T.C. Memo. 1997-72.                  
               Petitioners’ tax adviser testified at trial that he reviewed           
          the pleadings in petitioner’s lawsuit, the final settlement                 
          agreement, and the applicable tax law and discussed petitioner’s            
          lawsuit with Mr. Simon and petitioner before recommending to                
          petitioners that the settlement proceeds were excludable under              
          section 104(a)(2).  The tax adviser made the recommendation                 
          around the time of the final settlement agreement and the filing            
          of petitioners’ 1995 tax return.  After reviewing the entire                
          record, we find petitioners' reliance on their tax adviser                  
          reasonable and in good-faith, and we conclude that the accuracy-            
          related penalty should not be imposed in this case.                         
               In reaching our holdings herein, we have considered all                
          arguments made, and to the extent not mentioned above, we find              
          them to be irrelevant or without merit.                                     

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