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reasonable cause and in good faith. See sec. 6664(c)(1); Higbee
v. Commissioner, supra at 446. The mere fact that we held
against petitioners with respect to petitioner’s employment
status does not, in and of itself, require holding for respondent
on the accuracy-related penalty. See Hitchins v. Commissioner,
103 T.C. 711, 719 (1994).
Petitioners contend that they are not liable for accuracy-
related penalties because they reasonably relied on their tax
return preparer. On the basis of the entire record in this case
and in light of the nature of petitioner’s occupation as a life
insurance salesperson, we find that petitioners’ reliance on
their tax return preparer that petitioner was a statutory
employee was reasonable. Therefore, petitioners are not liable
for the accuracy-related penalties for the years in issue.
Accordingly, respondent’s determination on this issue is not
sustained.
We have considered all of the other arguments made by the
parties, and, to the extent that we have not specifically
addressed them, we conclude that they are without merit.
Reviewed and adopted as the report of the Small Tax Case
Division.
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