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the amounts paid, we have found that the Valentes did play a
meaningful role in the success of petitioner. That is in
contrast to respondent’s contention that the Valentes performed
no services and/or did not play a meaningful role in the
financial success of petitioner.
Petitioner contends that no penalty should apply here
because of its full disclosure to and reliance upon a competent
professional. See sec. 1.6664-4, Income Tax Regs. The
adjustments we have considered in these cases are quite technical
in nature (whether petitioner was a “mere holding company” within
the meaning of section 533 and whether the Valentes’ compensation
was reasonable). Although our holdings are generally unfavorable
to petitioner, we are convinced that petitioner relied on its
accountant and that reliance was reasonable. See United States
v. Boyle, 469 U.S. 241, 251 (1985). Petitioner’s accountant, who
testified at trial, was competent, and he was fully informed of
the factual predicate for deducting the compensation in dispute.
His testimony regarding the compensation reflected that he was
well informed. He relied, however, on factors that the Court
ultimately found insufficient to carry the day. Petitioner, vis-
a-vis the Valentes, had no tax expertise, and it was reasonable
to rely on a fully informed and competent professional in the
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