Santa Monica Pictures, LLC, Perry Lerner, Tax Matters Partner - Page 243

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               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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