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amounts of income not reported but eventually conceded by
petitioner, the characterization of those amounts was open to
reasonable doubt at the time petitioner filed his returns. Based
upon Mr. Rolling’s testimony and on other evidence submitted, we
find that Mr. Rolling was provided with necessary and accurate
information by both petitioner and Caspian. Finally, based upon
petitioner’s credible testimony, we find that petitioner relied
on Mr. Rolling for the preparation of his tax returns during the
years in issue, and that petitioner’s reliance was in good faith.
For the foregoing reasons, we conclude that petitioner
reasonably and in good faith relied on the advice of a competent
professional, and we hold that petitioner is not liable for the
section 6662(a) penalties.
Conclusion
We hold that petitioner did not receive rental income during
the years in issue and is thus not liable for any income tax
deficiencies relating to rental income. We further hold that
disbursements made by Caspian to and on behalf of petitioner were
loans and not constructive dividends. Finally, we hold that
petitioner is not liable for accuracy-related penalties.
In reaching our holdings, we have considered all arguments
made, and, to the extent not mentioned, we conclude that they are
moot, irrelevant, or without merit.
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