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related deduction. Blind reliance on a return preparer is not a
defense to negligence, and taxpayers retain a duty to file an
accurate return and generally are required to review their return
before signing it. Metra Chem Corp. v. Commissioner, 88 T.C.
654, 662 (1987). Furthermore, in order to avoid a negligence
addition to tax with respect to an error on a return, the error
must be the result of the preparer’s mistake based upon otherwise
correct information provided by the taxpayer. Pessin v.
Commissioner, 59 T.C. 473, 489 (1972). Submitting the Schedule
K-1 reflecting an improper loss to their return preparer, and in
turn receiving a completed tax return reflecting the same loss,
does not constitute a defense to negligence in the Bronsons’
case.
Finally, petitioners cite Hummer v. Commissioner, T.C. Memo.
1988-528, for the proposition that taxpayers cannot be negligent
where the relevant legal issue was “not well settled”.
Petitioners, however, did not receive substantive advice
concerning the deduction from anyone independent of the
investment, nor did they conduct their own investigation into the
propriety of the deduction. Indeed, there is no indication that
petitioners ever were aware of the nature of the purportedly
uncertain legal issues involved. Petitioners may not rely upon a
“lack of warning” as a defense to negligence where no reasonable
investigation was ever made, and where they were repeatedly
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