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Partners’”. Petitioner now denies signing any partnership
documents.10
Based on the record as a whole, we conclude that petitioner
was an investor in the partnership RCR #1, and that she invested
in the partnership in 1981.
Petitioner argues that she is not liable for the negligence
additions to tax because she had “reasonable cause for tax claims
on the subject returns” and that she made “reasonable inquiries
into ascertaining the nature of the claim and received assurances
of its accuracy.” In support of this argument, petitioner
asserts that she reasonably relied on Mr. Hoyt to accurately
prepare her returns.
Good faith reliance on professional advice concerning tax
laws may be a defense to the negligence penalties. United States
v. Boyle, 469 U.S. 241, 250-251 (1985). However, “Reliance on
professional advice, standing alone, is not an absolute defense
to negligence, but rather a factor to be considered”. Freytag v.
Commissioner, 89 T.C. 849, 888 (1987), affd. 904 F.2d 1011 (5th
Cir. 1990), affd. 501 U.S. 868 (1991). In order to be considered
as such, the reliance must be reasonable. Id. To be objectively
10Similar contradictory statements were made in the initial
petition signed by both petitioner and Mr. Barnes. In the
petition, petitioner alleges that she was a general partner in
RCR #1 (as well as another partnership, River City Ranches #2)
during 1981, and that she was personally liable on a note in the
amount of $116,780 related to her partnership investment.
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