- 16 - failing to file a timely income tax return, unless such failure to file is due to reasonable cause and not due to willful neglect. The addition to tax is 5 percent of the amount required to be reported on the return for each month or fraction thereof during which such failure to file continues, not to exceed 25 percent in the aggregate. See sec. 6651(a)(1); United States v. Boyle, 469 U.S. 241 (1985). There is, and we do not understand respondent to argue otherwise, no evidence indicating that petitioner’s failure to file was the result of willful neglect. Thus, the question is whether petitioner has demonstrated reasonable cause for the failure. The failure to file flows directly from Mr. Braun’s advice that petitioner incurred no liability from the loan transactions. Petitioner argues that its reliance on that advice constituted reasonable cause. We have held in various situations that reliance on expert advice constitutes reasonable cause. See, e.g., Citrus Valley Estates, Inc. v. Commissioner, 99 T.C. 379, 463 (1992); see also United States v. Boyle, supra at 250- 251. Mr. Braun is a lawyer with extensive experience in the area of retirement plans. He was fully aware of all of the relevant facts. He researched the issue and advised petitioner that he believed the loans would not violate any of the provisions of ERISA or cause any tax liability under section 4975. The ERISAPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011