- 51 -
correct, and the burden is on the taxpayer to show a lack of
negligence. Hall v. Commissioner, 729 F.2d 632, 635 (9th Cir.
1984), affg. T.C. Memo. 1982-337.27
Section 6664(c) provides an exception to the accuracy-
related penalty under section 6662(a). The exception applies if
it is shown that there was reasonable cause for the underpayment
and that the taxpayer acted in good faith with respect to the
underpayment. Sec. 6664(c). The determination of whether a
taxpayer acted with reasonable cause and good faith is made on a
case-by-case basis, taking into account all the pertinent facts
and circumstances. Sec. 1.6664-4(b)(1), Income Tax Regs. The
extent of the taxpayer’s effort to assess his proper tax
liability is the most important factor. Id.
Russell claims that he is not liable for the section 6662(a)
penalties because he relied in good faith on the advice of his
accountant, Mr. Feldmann, and most of the adjustments relate to
oil and gas transactions which were handled by Melvin and his
family. The accuracy-related penalty under section 6662(a) may
be avoided if the taxpayer shows reliance on the advice of a
professional which was reasonable and in good faith. Sec.
1.6664-4(b)(1), Income Tax Regs. Reasonable cause can be
established if a taxpayer can show reasonable reliance on the
27As previously noted, sec. 7491 does not apply in this
case. See supra note 14.
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