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and an increase of his self-employment deduction of $371 as
determined by respondent for 1993.
Southern Auto filed an amended 1994 Form 1120S, U.S. Income
Tax Return for an S Corporation, to reduce its ordinary income by
$20,180. Based on revised Schedules K-1 from Southern Auto,
petitioners filed claims for refund. Respondent’s position is
that these claims for refund are meritless because there was no
showing that the $20,180 actually was reported in more than 1 tax
year. No evidence was presented by petitioners to prove that
fact. In other words, petitioners did not establish that the
amount in question was reported in more than 1 tax year. We hold
that petitioners are not entitled to a reduction in their 1994
income.
Section 6662(a) provides for an accuracy-related penalty in
the amount of 20 percent of the portion of an underpayment of tax
attributable to, among other things, negligence or disregard of
rules or regulations. Sec. 6662(a), (b)(1). Section 6664(c)(1)
provides that no penalty shall be imposed if it is shown that
there was reasonable cause for the underpayment and that the
taxpayer acted in good faith. The determination of whether a
taxpayer acted with reasonable cause and in good faith depends
upon the facts and circumstances. Sec. 1.6664-4(b)(1), Income
Tax Regs. Reliance on the advice of an accountant may
demonstrate reasonable cause and good faith. United States v.
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