- 12 -
258 (1997), affd. 166 F.3d 332 (4th Cir. 1998). In the present
case, the record establishes that petitioners did not comply, or
substantially comply, with the recordkeeping and return
requirements with respect to either the contribution of the
Winter Haven property or the boat.
However, petitioners relied on Mr. Nunez to prepare their
1996 income tax return. Mr. Nunez suggested to petitioners that
the transaction with Community Church be structured as a part
sale/part gift. We are satisfied that petitioners in good faith
reasonably relied on the advice of Mr. Nunez to properly account
for the transaction between petitioners and Community Church with
regard to the Winter Haven property. Accordingly, we conclude
that the accuracy-related penalty with regard to the underpayment
attributable to the Winter Haven property should not be imposed.
In contrast, petitioners did not seek the advice of Mr.
Nunez with respect to the contribution of the boat. Thus,
petitioners did not reasonably rely on the advice of a return
preparer with respect to the boat contribution. Likewise,
petitioners offered no evidence that their disregard of the
recordkeeping and reporting requirements with respect to the boat
was reasonable. Accordingly, we sustain respondent’s imposition
of the accuracy-related penalty with regard to the underpayment
attributable to the charitable contribution of the boat.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011