-311-
challenge the tax treatment and that a court could
sustain the challenge. Because the Company would bear
the burden of proof required to support items
challenged by the IRS, in rendering our opinions, we
have assumed that the Company, or other appropriate
taxpayer, will undertake the effort and expense to
present fully the case in support of any matter that
the IRS challenges.
We conclude that Mr. Lerner did not reasonably rely on the
Chamberlain Hrdlicka opinion in preparing SMP’s and Corona’s 1997
and 1998 partnership tax returns.213
8. Conclusion
We conclude that the advice that petitioner claims he relied
upon in preparing SMP’s and Corona’s 1997 and 1998 partnership
tax returns does not satisfy the reasonable cause exception and
does not provide a basis for avoiding the accuracy-related
penalties.
213 The Chamberlain Hrdlicka opinion was issued after Mr.
Lerner prepared and filed SMP’s and Corona’s 1997 partnership tax
returns. Mr. Lerner claims, however, that he had discussions
with Mr. Valentino prior to filing the 1997 returns and that Mr.
Valentino’s oral advice closely tracked the written advice, as
well as Mr. Levinton’s conclusions. Mr. Lerner did not call Mr.
Valentino as a witness, and, with the exception of Mr. Lerner’s
self-serving testimony, we have no basis for determining the true
nature of Mr. Lerner’s discussions with Mr. Valentino or any way
to gauge his reliance on any advice Mr. Valentino might have
given. In any event, if the advice was consistent with the
Chamberlain Hrdlicka opinion letter, Mr. Lerner could not have
reasonably relied upon it.
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