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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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