Gavin Polone - Page 62

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          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 the advice of a professional.  See id.                          
               The record establishes that petitioner reasonably and in               
          good faith relied on his return preparers and attorneys.                    
          Petitioner fully disclosed the facts surrounding the settlement             
          payments to his return preparers and attorneys.  Petitioner                 
          directed his return preparers to report the settlement payments             
          from UTA in the clearest and most proper way.  His return                   
          preparers consulted with tax attorneys before preparing                     
          petitioner’s returns in issue.                                              
               Consequently, we conclude that for 1997 and 1998 petitioner            
          had reasonable cause and acted in good faith as to any                      
          underpayment resulting from the exclusion of the May 1997 payment           
          and the November 1998 payment.  Accordingly, we hold that                   
          petitioner is not liable for the penalty pursuant to section                
          6662(a).32                                                                  






               32  We note that sec. 6662(d)(2)(B) provides an additional             
          basis for relieving petitioner from the sec. 6662 penalty--                 
          petitioner adequately disclosed the relevant facts regarding the            
          payments he received pursuant to the defamation agreement on his            
          1997 and 1998 tax returns.                                                  






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