- 23 -
6662(d)(2)(B)(ii).13 See sec. 6662(d)(2)(B) and (C).
In addition, section 6664(c)(1) provides that a penalty
under section 6662 shall not be imposed on any portion of an
underpayment if the taxpayer shows reasonable cause for such
portion of the underpayment and that the taxpayer acted in good
faith with respect to such portion. Reliance on the advice of a
professional, such as an accountant, may constitute a showing of
reasonable cause if, under all the facts and circumstances, such
reliance is reasonable and the taxpayer acted in good faith. See
sec. 1.6664-4(c), Income Tax Regs.
Petitioner asserts that no penalties under section 6662(a)
and (b)(2) should be imposed because he qualifies under the
section 6664(c)(1) reasonable cause and good faith exception.
Petitioner maintains that he relied upon the accountants who
prepared his returns. In connection with his disallowed 1992,
1993, and 1995 Villa del Mar deductions, petitioner further notes
that respondent earlier examined his 1988 return and had fully
allowed him all of his claimed 1988 business deductions from
Villa del Mar. We disagree.
13The Omnibus Budget Reconciliation Act of 1993 (OBRA 1993),
Pub. L. 103-66, sec. 13251(a), 107 Stat. 531, amended sec.
6662(d)(2)(B)(ii), to also require a reasonable basis for the tax
treatment of the item. This amendment is effective for returns
the due dates for which (determined without regard to extensions)
are after Dec. 31, 1993. See OBRA 1993, sec. 13251(b), 107 Stat.
531.
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011