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[Hinman] sent me. I--my wife and I signed and returned it. He’s
a CPA and I figured he knew how to handle that situation”,
referring to $20,000 reported on his 1995 return as interest, for
which he could not recollect the source.
Jean Ann Richard has also failed to prove she reasonably
relied on her return preparer. Jean Ann Richard’s returns for
1994 and 1995 were not prepared by Mr. Hinman. The record
contains no information regarding Mr. Mayhall (the individual who
prepared her returns), Mr. Mayhall’s competency or expertise,
what information Jean Ann Richard provided to him, or whether he
issued any advice upon which Jean Ann Richard relied.
We hold petitioners are liable for the accuracy-related
penalty due to substantial understatement of income tax pursuant
to section 6662(a) and (b)(2), to the extent the Rule 155
computation shows an underpayment of tax.
B. The Cordeses and the Accuracy-Related Penalty Due to
Negligence or Disregard of Rules or Regulations
Respondent determined in docket No. 7369-99 that the
Cordeses were liable for the accuracy-related penalty due to
negligence or disregard of rules or regulations, pursuant to
section 6662(a) and (b)(1).
Negligence is defined as “any failure to make a reasonable
attempt to comply with the provisions of * * * [the Internal
Revenue Code]”. Sec. 6662(c); Neely v. Commissioner, 85 T.C.
934, 947 (1985) (negligence is lack of due care or failure to do
what a reasonable and prudent person would do under the
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