- 45 -
presented to indicate that he “reasonably relied upon the
expertise and advice” of his accountant, however, was his own
self-serving testimony, which we are not required to accept. See
Tokarski v. Commissioner, 87 T.C. 74, 76 (1986). Petitioner’s
1993 return does not indicate that the marketability discount was
taken on the advice of his accountant or that petitioner
consulted his accountant. Further, there is no evidence that
petitioner retained an expert to value the stock before claiming
the marketability discount. To the contrary, the schedules
indicate that the additional discount was taken because
petitioner felt that the stock was restricted and that an
additional discount was warranted.26
We find that petitioner has failed to prove that there was
reasonable cause for the understatement and that he acted in good
faith in applying an additional discount to reduce the value of
the Zila stock acquired by exercising his stock options. We
hold, therefore, that petitioner is liable for an accuracy-
related penalty with respect to the additional income generated
by the exercise of his Zila stock options.
25(...continued)
of income tax. See sec. 6662(b)(2), (d)(2)(B); sec. 1.6662-4(a),
Income Tax Regs.
26Petitioner’s reporting position regarding the additional
discount was inconsistent with the Form 1099 furnished by Zila,
which allowed a blockage discount of only $282,979.
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