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Commissioner, 696 F.2d at 1234 (“No reasonable person would have
trusted this scheme to work.”).
Petitioners argue that the penalty may not be imposed with
respect to any portion of the underpayments because there was
reasonable cause for the underpayments and they acted in good
faith with respect to the underpayments. See sec. 6664(c)(1).
In determining whether a taxpayer acted in good faith, we look at
such factors as the taxpayer’s knowledge and experience, the
taxpayer’s reliance, if any, on the advice of well-informed and
competent professionals, and the taxpayer’s efforts to assess his
proper tax liability. See Stubblefield v. Commissioner, T.C.
Memo. 1996-537; sec. 1.6664-4(b)(1), Income Tax Regs.
Petitioners introduced no evidence of the Castros’ knowledge
or experience in financial and tax matters or of the knowledge
and experience of any professionals with whom they may have
consulted to complete their income tax returns for the years at
issue. Petitioners argue only that they maintained complete and
accurate books and records and that the CCJT reported the jewelry
business’ income.
We reject petitioners’ arguments. A taxpayer’s effort to
ascertain his correct tax liability is the most important factor
in deciding whether a taxpayer acted in good faith within the
meaning of sections 6662 and 6664(c)(1). Petitioners have
offered no evidence other than petitioner’s testimony in support
of their argument that they are not liable for the accuracy-
related penalties. That testimony offers no insight into the
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