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reasonable cause and in good faith depends upon the facts and
circumstances. See sec. 1.6664-4(b)(1), Income Tax Regs.
Reliance on the advice of an accountant may demonstrate
reasonable cause and good faith. See sec. 1.6664-4(b)(1), Income
Tax Regs.
Petitioner contends that it complied with all record-keeping
obligations, provided Ford Motor Company Dealer Financial
Statements to the accountant, had other records available for
review, and relied in good faith on the advice of the accountant.
Petitioner, however, did not provide its accountant with
sufficient information from which an accurate return could be
prepared. Under such circumstances, reliance on an accountant’s
advice is not in good faith and does not establish that the
taxpayer acted with reasonable cause. See Estate of Monroe v.
Commissioner, 104 T.C. 352, 366-367 (1995). Accordingly,
petitioner is liable for accuracy-related penalties relating to
1993 and 1994.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011