Manuel and Luella J. Delara - Page 7




                                        - 6 -                                         

          222 (1992).  Although a taxpayer is not subject to the addition             
          to tax for negligence where the taxpayer makes honest mistakes in           
          complex matters, the taxpayer must take reasonable steps to                 
          determine the law and to comply with it.  Id.                               
               Under certain circumstances, a taxpayer may avoid the                  
          accuracy-related penalty for negligence where the taxpayer                  
          reasonably relied on the advice of a competent professional.                
          Sec. 1.6664-4(b)(1), Income Tax Regs.; sec. 6664(c); Freytag v.             
          Commissioner, 89 T.C. 849, 888 (1987), affd. 904 F.2d 1011 (5th             
          Cir. 1990), affd. 501 U.S. 868 (1991).  However, reliance on a              
          professional adviser, standing alone, is not an absolute defense            
          to negligence; it is only one factor to be considered.  In order            
          for reliance on a professional adviser to relieve a taxpayer from           
          the negligence penalty, the taxpayer must establish that the                
          professional adviser on whom he or she relied had the expertise             
          and knowledge of the relevant facts to provide informed advice on           
          the subject matter.  Freytag v. Commissioner, supra at 888.                 
               Petitioners made no effort to ascertain the professional               
          background and qualifications of their return preparer, Mr.                 
          Beltran.  They did not review the return prepared by Mr. Beltran.           
          Petitioners clearly did not make a reasonable effort to determine           
          whether their return was accurate.  Petitioners made no effort to           
          contact other tax professionals to verify the accuracy of the               
          return prepared by Mr. Beltran.  The Court is satisfied from the            





Page:  Previous  1  2  3  4  5  6  7  8  9  10  Next

Last modified: May 25, 2011