- 65 -
interest income. For 1990, petitioners reported business income
of $297,756. Petitioner testified that she believed that her
wage income for 1990 was grouped in with the business income
reported on the return. Petitioner further testified that she
believed the return was correct because it was prepared and
signed by petitioners’ accountant, Mr. Danley.
We find that petitioner had reasonable cause for the
understatement caused by the omitted wage income and omitted
interest income. Furthermore, we believe petitioner acted in
good faith in erroneously concluding that the wage income and
interest income was included in the 1990 return. Given the
extreme facts and circumstances of this case, we believe that
respondent abused his discretion by failing to grant petitioner
relief from joint liability for the accuracy-related penalty for
1990. Accordingly, we hold that petitioner is not liable for
this penalty for 1990.
To reflect the foregoing,
Decisions will be entered
under Rule 155.
Page: Previous 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 NextLast modified: May 25, 2011