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T.C. 158, 173 (1978); Pessin v. Commissioner, 59 T.C. 473, 489
(1972); Garcia v. Commissioner, T.C. Memo. 1998-203, affd.
without published opinion 190 F.3d 538 (5th Cir. 1999).
Applying these principles to the instant case, we conclude
that petitioners have sustained their burden of establishing
reasonable cause and good faith for their failure to report
income related to the Little Rascals transaction. Petitioners
consulted with both their attorney, Mr. Polse, and their
accountant, Mr. Kehl, regarding tax implications prior to forming
the charitable remainder unitrust. Furthermore, Mr. Polse
suggested and drafted the trust agreement only after being
apprised by petitioners of their goals and intentions with regard
to the sale of their business. In addition, petitioners signed
the separate covenant document only after it had been reviewed by
Mr. Kehl and modified to comply with his specifications.
Petitioners were thus clearly relying on professional advisers
throughout the transfer of their business, and these
professionals were supplied both with subjective information such
as financial goals and with objective data such as physical
documentation. Finally, we note that reported decisions
addressing treatment of noncompetition agreements generally
involve a case-by-case analysis of intentions and offer few
bright lines to guide taxpayers and tax practitioners. Given
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