Harold E. Nicholas - Page 13




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          independent contractor, he therefore could not be a statutory               
          employee.  See sec. 3121(d)(3); Lickiss v. Commissioner, T.C.               
          Memo. 1994-103.                                                             
               Respondent also determined penalties for negligence under              
          section 6662(a) for the years in issue.  Section 6662(a) provides           
          that, if the section applies, there is imposed a penalty in an              
          amount equal to 20 percent of the portion of the underpayment.              
          The penalty applies, inter alia, to an underpayment due to                  
          negligence or disregard of the rules or regulations.  See sec.              
          6662(b)(1).  The term “disregard” includes “any careless,                   
          reckless, or intentional disregard.”  Sec. 6662(c).  Negligence             
          includes “any failure to make a reasonable attempt to comply”.              
          Id.                                                                         
               We do not understand respondent’s argument that petitioner’s           
          conduct falls within the “disregard” ambit of section 6662(b)(1).           
          We focus, therefore, on whether petitioner’s actions constituted            
          negligence.                                                                 
               A good faith reliance on advice from a qualified accountant            
          can be a defense to the accuracy-related penalty for negligence             
          in certain circumstances.  See Schwalbach v. Commissioner, 111              
          T.C. 215, 230 (1998).  Petitioner must establish that the adviser           
          was qualified, that he supplied all relevant information, and               
          that he relied on the advice in good faith.  Id.  These                     
          requirements are satisfied here.                                            






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