Richard and Judith Haeder - Page 44




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          affg. T.C. Memo. 1993-634; Weis v. Commissioner, 94 T.C. 473, 487           
          (1990); Ma-Tran Corp. v. Commissioner, 70 T.C. 158, 173 (1978).             
               Petitioner did not testify that he supplied Mr. Fuller, who            
          prepared the returns for 1991 and 1992, with complete and                   
          accurate information or that the incorrect reporting of the                 
          disputed items was a result of the preparer's mistakes.                     
          Additionally, Mr. Fuller did not testify that the incorrect                 
          reporting of the items adjusted by respondent was a result of his           
          mistakes.16  Moreover, with respect to the deductions claimed for           
          wage expense, medical plan expenses, and IRA contributions, the             
          record fails to show that either petitioner or Mr. Fuller engaged           
          in any factual or legal analysis to determine whether Mrs. Haeder           
          qualified as petitioner’s employee.  Petitioners, therefore, have           
          failed to establish that the underpayment for the years in issue            
          resulted from their good faith reliance on the advice of their              
          tax preparer.  Accordingly, petitioners have failed to carry                
          their burden, and we sustain respondent’s determination as to the           
          accuracy-related penalties.                                                 
          Accuracy-Related Penalties for Substantial Understatements of Tax           
               Respondent determined that for 1989, 1990, and 1993                    
          petitioners were liable for accuracy-related penalties under                

               16Although Mr. Fuller testified at trial that he incorrectly           
          reported commissions refunded in 1990 in connection with                    
          petitioner’s investment in Floating Point stock and overstated              
          dividend income in 1992, these items either are not at issue in             
          this case or do not affect adversely to petitioners the                     
          calculation of the deficiencies.                                            




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