John M. and Carolyn Merritt - Page 11

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          facts and circumstances.  Sec. 1.6664-4(b)(1), Income Tax Regs.             
          Relevant factors include the taxpayer's efforts to assess his               
          proper tax liability, including the taxpayer's reasonable and               
          good-faith reliance on a tax professional, such as an accountant.           
          Id.                                                                         
               On the facts and testimony before us and in light of the tax           
          adjustments involved herein, we believe that petitioners                    
          reasonably relied on the advice of their C.P.A. in the                      
          preparation of the tax returns in issue.  Petitioners had                   
          reasonable cause for the deficiencies in issue, and petitioners             
          acted in good faith.  Petitioners are not liable for the                    
          accuracy-related penalties determined by respondent under section           
          6662 with respect to the deficiencies in issue herein.                      
               To reflect the foregoing,                                              

                                             Decisions will be entered                
                                        under Rule 155.                               


















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