- 54 -
ual if it exceeds the greater of 10 percent of the tax required
to be shown or $5,000, sec. 6662(d)(1)(A), and (2) in the case of
a corporation if it exceeds the greater of 10 percent of the tax
required to be shown or $10,000, sec. 6662(d)(1)(B).
The accuracy-related penalty under section 6662(a) does not
apply to any portion of an underpayment if it is shown that there
was reasonable cause for, and that the taxpayer acted in good
faith with respect to, such portion. Sec. 6664(c)(1). The
determination of whether the taxpayer acted with reasonable cause
and in good faith depends on the pertinent facts and circum-
stances, including the taxpayer’s efforts to assess his or her
proper tax liability, the knowledge and experience of the tax-
payer, and the reliance on the advice of a professional, such as
an accountant. Sec. 1.6664-4(b)(1), Income Tax Regs. Reliance
on the advice of a professional, such as an accountant, does not
necessarily demonstrate reasonable cause and good faith, unless,
under all the circumstances, such reliance was reasonable and the
taxpayer acted in good faith. Id. In the case of claimed
reliance on the accountant who prepared the taxpayer’s tax
return, the taxpayer must establish that correct information was
provided to the accountant and that the item incorrectly omitted,
claimed, or reported in the return was the result of the accoun-
tant’s error. Westbrook v. Commissioner, 68 F.3d 868, 881 (5th
Cir. 1995), affg. T.C. Memo. 1993-634; Weis v. Commissioner, 94
Page: Previous 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 NextLast modified: May 25, 2011