Reed-Merrill, Inc. - Page 3

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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