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Whether Edgar acted with reasonable cause and in good faith
is a factual determination. See sec. 1.6664-4(b)(1), Income Tax
Regs. On the basis of Edgar’s experience, knowledge, and
education, we find that his actions were reasonable and that his
reliance on his longtime preparer was also reasonable. See,
e.g., Remy v. Commissioner, T.C. Memo. 1997-72. It is relevant
that Edgar made an effort to assess his tax responsibility by
seeking the advice of his accountant of long standing. See
Drummond v. Commissioner, T.C. Memo. 1997-71. Accordingly, we
hold that Edgar is not liable for an accuracy-related penalty
under section 6662(a) for 1989.
Whether Arthur Is Liable for a Delinquency Addition Under Section
6651(a)(1) and/or a Failure To Pay an Estimated Tax Addition
Under Section 6654
Section 6651 provides for an addition to tax of 5 percent
per month, not to exceed 25 percent of the amount of tax required
to be shown on a return, for failure to file. Unlike Edgar,
Arthur failed to file a return. Arthur’s failure to file went
beyond the period in 1993 when the State of California’s
appellate court affirmed the court’s holding that the money
should be returned because it belonged to Magna Carta. In this
regard, as of the time of trial, Arthur continued to hold the
money from the sale of the building. Also unlike Edgar, Arthur
did not rely on a tax professional. Accordingly, Arthur has
failed to show that his failure to file was, under his
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