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B. Whether Petitioners Are Liable for the Accuracy-Related
Penalty for 1995
Petitioners contend that they are not liable for the
accuracy-related penalty for negligence for 1995 because they
relied on Sawyer’s advice. We disagree.
A taxpayer may be relieved of liability for the accuracy-
related penalty if the taxpayer shows that he or she had
reasonable cause for the understatement and acted in good faith.
Reliance on the advice of a qualified tax professional may
constitute reasonable cause if that reliance was reasonable and
the taxpayer acted in good faith. Sec. 6664(c); sec. 1.6664-
4(a), Income Tax Regs. To establish good faith reliance on the
advice of a competent adviser, a taxpayer must show that he or
she provided the return preparer with complete and accurate
information and an incorrect return resulted from the preparer’s
mistake. Sec. 6662; DeCleene v. Commissioner, 115 T.C. 457, 477
(2000); Neonatology Associates, P.A. v. Commissioner, 115 T.C.
43, 99 (2000), affd. 299 F.3d 221 (3d Cir. 2002); sec. 1.6662-
3(a), Income Tax Regs.
Petitioners contend that they gave Sawyer complete and
accurate information to prepare their returns properly. We
6(...continued)
amount of the mortgage and depreciation on the property at the
time of the transfer were less than the $225,000 purchase price.
Petitioners also have not shown why transfers to a bank add to
petitioner’s basis in his FabuGlass stock. We conclude that the
record contains insufficient information from which to compute
petitioner’s basis.
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