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bears the burden of production. Sec. 7491(c); Higbee v.
Commissioner, 116 T.C. at 446. In that regard, respondent “must
come forward with sufficient evidence indicating that it is
appropriate to impose” the accuracy-related penalty. Id.
Respondent contends that he has met that burden.
A taxpayer may avoid the accuracy-related penalty by showing
that (1) there was reasonable cause for the underpayment, and (2)
he acted in good faith with respect to such underpayment. Sec.
6664(c)(1). Whether a taxpayer acted with reasonable cause and
in good faith is determined by the relevant facts and
circumstances, and most importantly, the extent to which he
attempted to assess his proper tax liability. Sec. 1.6664-
4(b)(1), Income Tax Regs. The good faith reliance on the advice
of an independent, competent professional as to the tax treatment
of an item may meet this requirement. United States v. Boyle,
469 U.S. 241 (1985).
In order for reliance on professional advice to excuse a
taxpayer from the negligence additions to tax, the reliance must
be reasonable, in good faith, and based upon full disclosure.
Id.; see Weis v. Commissioner, 94 T.C. 473, 487 (1990). A
taxpayer acts reasonably when he provides his accountant or
attorney with all relevant information necessary to prepare his
tax return, and he relies, in good faith, on the advice of his
attorney or accountant regarding a matter of substantive tax law.
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Last modified: May 25, 2011