- 10 -
petitioner supplied Mr. Norris with the necessary information to
file an accurate return, he has not shown that the incorrect
return was a result of Mr. Norris’s mistake. Respondent argues
that an omission of $4 million in these circumstances is so
substantial that petitioner could not have reasonably relied on
the return and should have made further inquiries as to its
accuracy.
The general rule is that taxpayers have a duty to file
complete and accurate tax returns and cannot avoid this duty by
placing responsibility with an agent. United States v. Boyle,
469 U.S. 241, 250-251 (1985); Metra Chem Corp. v. Commissioner,
88 T.C. 654, 662 (1987). However, in limited situations, the
section 6653(a) additions to tax may be avoided if the taxpayer
shows good faith reliance on the advice of a competent and
experienced accountant or attorney in the preparation of the tax
return. Weis v. Commissioner, 94 T.C. 473, 487 (1990); Conlorez
Corp. v. Commissioner, 51 T.C. 467, 474 (1968). In order to show
good faith reliance, the taxpayer must establish that all
necessary information was supplied to the return preparer and
that the incorrect return resulted from the preparer’s mistakes.
Weis v. Commissioner, supra at 487; Pessin v. Commissioner, 59
T.C. 473, 489 (1972).
The evidence in the record indicates that Mr. Norris is a
competent and experienced accountant. The parties agree that Mr.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011