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reasonable reliance on a competent professional adviser is shown.
Leonhart v. Commissioner, 414 F.2d 749, 750 (4th Cir. 1969) affg.
T.C. Memo. 1968-98; Freytag v. Commissioner, 89 T.C. 849, 888
(1987), affd. 904 F.2d 1011 (5th Cir. 1990), affd. 501 U.S. 868
(1991). Such reliance is not an absolute defense to negligence
but is merely a factor to be considered. Id.
For reliance on professional advice to excuse a taxpayer
from the negligence penalty, the taxpayer must show that the
professional adviser had the expertise and knowledge of the
pertinent facts to provide informed advice on the subject matter.
Leonhart v. Commissioner, supra; Freytag v. Commissioner, supra;
Stone v. Commissioner, T.C. Memo. 1996-230; Reimann v.
Commissioner, T.C. Memo. 1996-84.
In order for reliance on professional advice to excuse a
taxpayer from the negligence penalty, the reliance must be
reasonable, in good faith, and based upon full disclosure. Zfass
v. Commissioner, 118 F.3d 184, 188 (4th Cir. 1997), affg. T.C.
Memo. 1996-167; Freytag v. Commissioner, supra at 888. We do not
find such reliance on petitioner's part.
Petitioner's return preparer strongly suggested to her that
CNC did not sound like a "normal" investment and that her
investment funds were in jeopardy. He advised her that she
should attempt to recover her investment. Petitioner offered no
evidence that she could not have recovered her investment at any
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