-20-
exception to the accuracy-related penalty applies to any portion
of an underpayment if the taxpayer can prove that there was
reasonable cause for the taxpayer’s position and that the
taxpayer acted in good faith with respect to that portion. Sec.
6664(c)(1); sec. 1.6664-4(b), Income Tax Regs.
The determination of whether a taxpayer acted with
reasonable cause and in good faith depends on the pertinent facts
and circumstances, including the taxpayer’s efforts to assess his
or her proper tax liability, the knowledge and experience of the
taxpayer, and the reliance on the advice of a professional. Sec.
1.6664-4(b)(1), Income Tax Regs. When a taxpayer selects a
competent tax adviser and supplies him or her with all relevant
information, it is consistent with ordinary business care and
prudence to rely upon the adviser’s professional judgment as to
the taxpayer’s tax obligations. United States v. Boyle, 469 U.S.
241, 250-251 (1985). Moreover, a taxpayer who seeks the advice
of an adviser does not have to challenge the adviser’s
conclusions, seek a second opinion, or try to check the advice by
reviewing the tax code himself or herself. Id.
Mr. Facq knew he was not educated in United States tax law
and decided to seek professional assistance in preparing
petitioners’ returns. He retained tax attorneys, Chicoine &
Hallett, and accountants, Sweeny Conrad, and relied upon them to
accurately and properly prepare a return for 2000. We find
nothing in the record to indicate that it was unreasonable for
Mr. Facq to accept the advice of his advisers and not to seek a
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011