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check. Russell testified that he thought Mr. Feldmann was aware
of any reimbursements for the drilling costs when the oil and gas
information was provided to him.
Russell has not shown that there was reasonable cause for
the underpayment attributable to the overstated IDC deduction and
that the he acted in good faith with respect to the underpayment.
Russell was aware that a portion of IDCs might be reimbursed to
him, yet he did not take steps to inquire as to whether any
amount was reimbursed to him in 1995. In the instant situation,
he cannot avoid his duty to file an accurate tax return by
placing the responsibility with Carolyn to provide Mr. Feldmann
with the correct information regarding the amount of IDCs.
Accordingly, we hold that Russell and Clarice are liable for the
accuracy-related penalty on the portion of the underpayment
attributable to the IDC adjustment.
With respect to the Schedule C production tax deduction, Mr.
Feldmann testified that he would have calculated this based on
the information he received from Russell’s family or Melvin’s
family. Russell’s only claim with respect to this adjustment is
that he reasonably relied on the advice of Mr. Feldmann. He has
not shown that all necessary information was supplied to Mr.
Feldmann and that the overstated deduction resulted from Mr.
Feldmann’s mistake. Russell and Clarice have not established
that they had reasonable cause or good faith with respect to this
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