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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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