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2. W.C. Houchin Corp.
Respondent determined a tax deficiency of $1,211,643 for
1998.
William Houchin provided the accountant that prepared W.C.
Houchin Corp.’s Federal income tax return, Jim Garner, all
records and information necessary to prepare its 1998 Federal
income tax return. Mr. Garner conversed with William Houchin to
determine the correct treatment of the settlement agreement
proceeds. William Houchin relied upon Mr. Garner to prepare the
return, and Mr. Garner was aware of Mr. Houchin’s reliance. It
is clear from the record that W.C. Houchin Corp. reasonably
relied in good faith on its accountant. Consequently, we
conclude that for 1998 W.C. Houchin Corp. had reasonable cause
and acted in good faith as to any underpayment resulting from the
settlement agreement proceeds. Accordingly, we hold that W.C.
Houchin Corp. is not liable for the penalty pursuant to section
6662(a).
In reaching our holding herein, we have considered all
arguments made, and, to the extent not mentioned above, we
conclude that they are irrelevant or without merit.
To reflect the foregoing,
Decisions will be entered
under Rule 155.
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