- 25 -
the taxpayer’s proper tax liability. * * * [Sec.
1.6664-4(b)(1), Income Tax. Regs.]
Reliance upon the advice of an expert tax preparer may, but
does not necessarily, demonstrate reasonable cause and good faith
in the context of the section 6662(a) penalty. Id.; see also
United States v. Boyle, 469 U.S. 241, 251 (1985); Freytag v.
Commissioner, supra at 888. Such reliance is not an absolute
defense, but it is a factor to be considered. Freytag v.
Commissioner, supra at 888.
In order for this factor to be given dispositive weight, the
taxpayer claiming reliance on a professional must show, at
minimum, that (1) the preparer was supplied with correct
information and (2) the incorrect return was a result of the
preparer’s error. See, e.g., Westbrook v. Commissioner, 68 F.3d
868, 881 (5th Cir. 1995), affg. T.C. Memo. 1993-634; Cramer v.
Commissioner, 101 T.C. 225, 251 (1993), affd. 64 F.3d 1406 (9th
Cir. 1995); Ma-Tran Corp. v. Commissioner, 70 T.C. 158, 173
(1978); Pessin v. Commissioner, 59 T.C. 473, 489 (1972).
As previously indicated, section 7491(c) places the burden
of production on the Commissioner. The Commissioner satisfies
this burden by “com[ing] forward with sufficient evidence
indicating that it is appropriate to impose the relevant penalty”
but “need not introduce evidence regarding reasonable cause,
substantial authority, or similar provisions.” Higbee v.
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011