- 9 -
position and that the taxpayer acted in good faith with respect
to that portion. 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. The most
important factor is the extent of the taxpayer’s effort to assess
his proper tax liability for the year. Id. Circumstances that
may indicate that a taxpayer acted with reasonable cause and in
good faith include “an honest misunderstanding of fact or law
that is reasonable in light of all of the facts and
circumstances, including the experience, knowledge, and education
of the taxpayer.” Id.
Further, in some instances, taxpayers can avoid the
accuracy-related penalty if they have furnished all of the
relevant information to a tax professional or return preparer and
relied on that person’s professional advice as to the proper tax
treatment. Jackson v. Commissioner, 86 T.C. 492, 539-540 (1986),
affd. 864 F.2d 1521 (10th Cir. 1989); Pessin v. Commissioner, 59
T.C. 473, 489 (1972). However, any reliance upon professional
tax advice must be reasonable. Freytag v. Commissioner, 89 T.C.
849, 888 (1987), affd. 904 F.2d 1011, 1017 (5th Cir. 1990), affd.
501 U.S. 868 (1991).
It is clear to the Court that petitioner is unsophisticated
as to tax matters. After providing his and Ms. Glenn’s tax
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011