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expenses for the years in issue. Mr. Wessman’s testimony
that petitioner provided him with all the necessary
information is bolstered by respondent’s concession. Mr.
Wessman further testified that he believed petitioner’s
returns were correct as filed. Petitioner credibly
testified that she relied on Mr. Wessman in determining the
tax treatment of her horse activity.
Petitioner did not produce any books, records, or other
work papers in response to respondent’s initial contact
letter. Additionally, petitioner did not agree to extend
the period of limitations or participate in the appeal
process. However, Mr. Wessman credibly testified that such
actions were taken in order to expedite the review process
so that the years in issue could be consolidated with the
prior Tax Court case. Given the circumstances, we find
petitioner did not act in bad faith.
We conclude that petitioner acted with reasonable cause
and in good faith. Accordingly, we hold that petitioner is
not liable for the accuracy-related penalties under section
6662(a).
In reaching our holdings, we have considered all
arguments and contentions made, and, to the extent not
mentioned, we conclude that they are moot, irrelevant, or
without merit.
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