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applicability of the reasoning of that case to petitioners’
situation. Carroll testified that he and Conrad had reached a
mutual decision to rely on Silverman with respect to the
gallery’s tax matters. Conrad and Maria’s reliance on Augustus
is reflected on the Form 8275 that was attached to the joint
income tax return that they filed for 1995. While Conrad and
Maria did not rely on Silverman to prepare their personal income
tax returns, they relied on the position that he advanced for
calculating the gallery’s COGS. Accordingly, because their
reliance on Silverman’s advice caused the underpayments on their
joint income tax returns for the years in issue, respondent’s
imposition of section 6662(a) penalties against Conrad and Maria
will not be sustained.
Conclusion
We hold that petitioners are liable for deficiencies in
their income taxes for 1995, 1996, and 1997. We also hold that
the accuracy-related penalties under section 6662(a) are
unwarranted because of petitioners’ reasonable and good faith
reliance on Silverman’s advice. We have considered the arguments
of the parties that were not specifically addressed in this
opinion. Those arguments are either without merit or irrelevant
to our decision.
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