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1. William C. and Josephine Houchin
Respondent determined an accuracy-related penalty under
section 6662(a) of $53,532 with regard to petitioners William C.
and Josephine Houchin’s 1999 Federal income tax.9 It is clear
from the record that William and Josephine Houchin provided their
accountant, Jim Garner, all records and information necessary to
prepare their 1999 Federal income tax return. Mr. Garner
conversed with William and Josephine Houchin to determine the
correct treatment of the settlement agreement proceeds. William
and Josephine Houchin relied upon Mr. Garner to prepare the
return, and Mr. Garner was aware of William and Josephine
Houchin’s reliance. It is clear from the record that William and
Josephine Houchin reasonably relied in good faith on their
accountant. We conclude that for the year in issue William and
Josephine Houchin had reasonable cause and acted in good faith as
to any underpayment resulting from the settlement agreement
proceeds. Accordingly, we hold that William and Josephine
Houchin are not liable for the penalty pursuant to section
6662(a).
9 Because we find for respondent with regard to the
recognition of income by W.C. Houchin Corp. in 1998, we need not
decide the deficiency issued to William and Josephine Houchin for
the year 1999 as petitioner and respondent stipulated the
treatment of the adjustments asserted in the notice of
deficiency.
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