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The relevant legal analysis about the application of section
6651(a)(1) to failures to file returns for section 4975 taxes is
set forth in Janpol v. Commissioner, 102 T.C. 499 (1994), and
need not be repeated here.
Relying on his own understanding of the law, petitioner
chose to sit “on both sides of the table in each transaction.”
Yamamoto v. Commissioner, 73 T.C. 946, 954 (1980), affd. 672 F.2d
924 (9th Cir. 1982). Relying on his own understanding of the
law, petitioner did not see any need to file section 4975 tax
returns to report any of the transactions. Relying again on his
own understanding of the law, petitioner chose to submit the
instant case fully stipulated without including evidence to show
that he did not benefit from the transactions. In Etter v. J.
Pease Const. Co., Inc., 963 F.2d 1005 (7th Cir. 1992), the
trustees succeeded in persuading the trial judge that they did
not benefit from the employee plan’s investment in the joint
venture. In the instant case, petitioner failed to persuade the
Court that he did not benefit from the transactions.
Petitioner’s good-faith belief that he was not required to
file tax returns does not constitute reasonable cause under
section 6651(a)(1) unless bolstered by advice from competent tax
counsel who has been informed of all the relevant facts. Stevens
Bros. Foundation, Inc. v. Commissioner, 39 T.C. 93, 133 (1962),
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