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Under some circumstances, however, a taxpayer may avoid
liability for the additions to tax for negligence under section
6653(a) if reasonable reliance on a competent professional
adviser is shown. Leonhart v. Commissioner, 414 F.2d 749, 750
(4th Cir. 1969), affg. T.C. Memo. 1968-98; Freytag v.
Commissioner, 89 T.C. 849, 888 (1987), affd. 904 F.2d 1011 (5th
Cir. 1990), affd. 501 U.S. 868 (1991). Such reliance is not an
absolute defense to negligence but is merely a factor to be
considered. Freytag v. Commissioner, supra.
For reliance on professional advice to excuse a taxpayer
from the negligence additions to tax, the taxpayer must show that
the professional adviser had the expertise and knowledge of the
pertinent facts to provide informed advice on the subject matter.
Leonhart v. Commissioner, supra; Freytag v. Commissioner, supra;
Stone v. Commissioner, T.C. Memo. 1996-230; Reimann v.
Commissioner, T.C. Memo. 1996-84.
Reliance on a professional adviser can be inadequate when
the taxpayer and his adviser knew nothing about the nontax
business aspects of the venture. Beck v. Commissioner, 85 T.C.
557 (1985); Flowers v. Commissioner, 80 T.C. 914 (1983). In
order for reliance on professional advice to excuse a taxpayer
from the negligence additions to tax, the reliance must be
reasonable, in good faith, and based upon full disclosure. Zfass
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