- 34 - 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.Page: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Next
Last modified: May 25, 2011