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underpayment if it is shown that there was a reasonable cause for
such portion and that the taxpayer acted in good faith with
respect to such portion. The determination of whether a taxpayer
acted with reasonable cause and in good faith depends upon the
facts and circumstances of each particular case. Sec. 1.6664-
4(b)(1), Income Tax Regs. Relevant factors include the
taxpayer's efforts to assess his or her proper tax liability, the
knowledge and experience of the taxpayer, and reliance on the
advice of a professional, such as an accountant. Drummond v.
Commissioner, T.C. Memo. 1997-71. The most important factor is
the extent of the taxpayer's effort to determine the taxpayer's
proper tax liability. Sec. 1.6664-4(b)(1), Income Tax Regs. An
honest misunderstanding of fact or law that is reasonable in
light of the experience, knowledge, and education of the taxpayer
may indicate reasonable cause and good faith. Remy v.
Commissioner, T.C. Memo. 1997-72.
In the notice of deficiency, respondent applied the section
6662(a) penalty to all adjustments with the exception of the
adjustments to petitioner's dependency exemptions and Schedule C
gross receipts. The underpayment upon which the penalty was
computed resulted from respondent's partial disallowance of
petitioner's claimed Schedule C car and truck expenses,
depreciation/section 179 expense deduction, rent or lease
expenses, and utilities expenses, along with respondent's total
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