Walter O. Bowen and Susan M. Bowen, et al. - Page 8




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          tax consequences.  Petitioners introduced no evidence regarding             
          Mr. Baker’s credentials or his knowledge and experience in                  
          preparing tax returns or analyzing trust arrangements for Federal           
          income tax purposes.  In short, petitioners failed to prove that            
          Mr. Baker was a competent tax adviser and that petitioners were             
          justified in relying on him.  See Ewing v. Commissioner, 91 T.C.            
          396, 423 (1988), affd. without published opinion 940 F.2d 1534              
          (9th Cir. 1991); sec. 1.6664-4(b), Income Tax Regs.                         
               In addition, petitioner admitted at trial and conceded on              
          brief that Mr. Baker did not have all the necessary information             
          to complete the returns properly.  There is no evidence that                
          petitioners gave Mr. Baker copies of the trust documents or other           
          information that would have allowed Mr. Baker to evaluate the               
          legitimacy of the trusts or analyze the tax consequences of the             
          trusts.                                                                     
               Because petitioners failed to prove they reasonably relied             
          on a fully informed and competent tax adviser and because they              
          did not assert any other basis for obtaining relief from the                
          section 6662(a) penalty, we hold that petitioners have failed to            
          prove that they had reasonable cause within the meaning of                  
          section 6664(c).4   We, therefore, sustain respondent’s                     


               4We note that petitioners did not argue that they relied on            
          NTS for accurate tax advice, nor did petitioners establish that             
          NTS was a competent professional or was composed of competent               
          professionals with expertise in tax matters.                                





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