- 19 - Reporting losses from a transaction entered into in taxable year 1995 on their 1994 income tax return simply does not demonstrate that petitioners exercised ordinary care and prudence in determining their tax obligation. Petitioners argue that they relied in good faith upon the tax advice and tax preparation services they received from Mr. Hoyt and Laguna Tax Service, an entity operated by Mr. Hoyt. Although Mr. Hoyt was an enrolled agent authorized to practice before the IRS, any tax advice from either Mr. Hoyt or Laguna Tax Service cannot be characterized as advice from an independent and competent tax professional. Rather, such advice is better classified as sales promotion. See Vojticek v. Commissioner, T.C. Memo. 1995-444. Since petitioners were required to remit to the Hoyt cattle operation 75 percent of their tax refunds, representations made by Mr. Hoyt or Laguna Tax Service would clearly be self-serving and unreliable. Petitioners did not consult any competent tax professional from outside the Hoyt cattle operation. For the foregoing reasons, we sustain respondent’s determinations that petitioners are liable for accuracy-related penalties for 1994 and 1995.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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