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reasonable cause for the underpayment and that the taxpayer acted
in good faith. The determination of whether a taxpayer acted
with 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 id.
Respondent concedes that petitioner is not liable for the
1994 accuracy-related penalty, but contends that “petitioner has
failed to substantiate even a third of the expenditures at issue
in this case.” We conclude that petitioner reasonably and in
good faith relied on his accountants. Accordingly, he is not
liable for the 1995 and 1996 accuracy-related penalties.
Contentions we have not addressed are moot, irrelevant, or
meritless.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011