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6664(c)(1). This determination is made considering all relevant
facts and circumstances. Relevant factors include the taxpayer’s
efforts to assess his proper tax liability, including his
reasonable and good faith reliance on the advice of a
professional. 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.
Higbee v. Commissioner, supra at 448-449. The taxpayer bears the
burden of proof regarding this exception. Id. at 447.
On brief, petitioners do not point to any specific
circumstances which might trigger the reasonable cause exception.
However, they do suggest that their failure to maintain adequate
records and to substantiate properly their expenses is
attributable to the alleged fact that “petitioners’ records
disappeared while in the possession of his now-deceased
accountant and that his subsequent accountant made an inadequate
effort to replace them.” Good faith reliance on a tax return
preparer or accountant to maintain required records, and a
failure by that representative to do so, may establish the
taxpayer’s entitlement to relief under section 6664(c)(1). See
Xuncax v. Commissioner, T.C. Memo. 2001-226. However, such a
loss or destruction of required records alone does not establish
that the taxpayer’s deductions and claimed expenses were founded
on reasonable cause and good faith when made. See id.
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