- 29 - Despite the fact that petitioners have the burden of proof, see supra note 3, petitioners have made no showing that they made an attempt to comply with the tax rules and regulations with regard to those deductions taken by Wolf Creek Farm for the years at issue which have been disallowed. Hence, with respect to those deductions, petitioners have failed to show that Wolf Creek Farm was not negligent. Nor have petitioners showed that they acted in good faith with respect to, or that there was reasonable cause for, the position they took. Further, petitioners do not claim that they relied on Mr. Bleeker or any other professional as to the tax treatment of the expenses for food and lodging.5 Petitioners simply assert that the accuracy-related penalty does not apply because Wolf Creek Farm properly claimed the deductions under section 162(a) and Mr. Tschetter properly excluded the payments under section 119. We have found to the contrary. 5Before the trial in these cases, respondent filed a motion to disqualify Mr. Bleeker from his representation of petitioners. Respondent’s motion was based, in part, on the premise that, if petitioners contend that they reasonably relied on Mr. Bleeker’s advice with respect to the proper tax treatment of the payments at issue, then Mr. Bleeker would be required to testify as a witness in the trial of these cases. The Court held a telephone conference call with Mr. Bleeker and counsel for respondent to discuss respondent’s motion. During that call, Mr. Bleeker informed the Court that petitioners did not intend to raise reasonable reliance on a tax professional as a defense to the accuracy-related penalties.Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Next
Last modified: May 25, 2011