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basis, taking into account all the pertinent facts and
circumstances. See sec. 1.6664-4(b)(1), Income Tax Regs.
Reasonable cause requires that the taxpayer have exercised
ordinary business care and prudence as to the disputed item. See
United States v. Boyle, supra; see also Estate of Young v.
Commissioner, 110 T.C. 297, 317 (1998). Good faith, reasonable
reliance on the advice of an independent, competent professional
as to the tax treatment of an item may meet this requirement.
See United States v. Boyle, supra; sec. 1.6664-4(b), Income Tax
Regs.; see also Richardson v. Commissioner, 125 F.3d 551 (7th
Cir. 1997), affg. T.C. Memo. 1995-554; Ewing v. Commissioner, 91
T.C. 396, 423 (1988), affd. without published opinion 940 F.2d
1534 (9th Cir. 1991).
It is obvious to us that petitioner (and intervenor for that
matter) relied entirely on the advice and recommendations of
counsel with respect to the filing of the 1998 joint return. We
are satisfied that, under the circumstances, her (their) reliance
was reasonable and in good faith. Accordingly, we hold that
petitioner is not liable for a section 6662(a) accuracy-related
penalty for 1998.
Reviewed and adopted as the report of the Small Tax
Division.
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