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required to be shown on the return over the tax actually shown on
the return. Sec. 6662(d)(2)(A).
Whether the accuracy-related penalty is applied because of
negligence or disregard of rules or regulations or a substantial
understatement of tax, the accuracy-related penalty does not
apply to any portion of the underpayment if it is shown that
there was reasonable cause for the taxpayer’s position and that
the taxpayer acted in good faith with respect to that portion.
Sec. 6664(c)(1); sec. 1.6664-4(b), Income Tax Regs.; see United
States v. Boyle, 469 U.S. 241, 242 (1985). The determination of
whether a taxpayer acted with reasonable cause and in good faith
is made on a case-by-case basis, taking into account all the
pertinent facts and circumstances. Sec. 1.6664-4(b)(1), Income
Tax Regs. Relevant factors include the taxpayer’s effort to
assess the taxpayer’s proper tax liability for such year,
including the taxpayer’s reasonable and good faith reliance on
the advice of a professional such as an accountant. Id. To show
good faith reliance on the accountant who prepared the taxpayer’s
return, the taxpayer must demonstrate that (1) he or she provided
the correct information to the accountant, and (2) the item
incorrectly claimed, omitted, or reported in the return was a
result of the accountant’s error. Westbrook v. Commissioner, 68
F.3d 868, 881 (5th Cir. 1995), affg. T.C. Memo. 1993-634; Weiss
v. Commissioner, 94 T.C. 473, 487 (1990).
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