Ronald A. and Carol J. Lehrer - Page 6

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          also determined that accuracy-related penalties applied because             
          of the substantial understatements of income tax.                           
               Petitioners timely filed a petition with this Court.                   
                                       OPINION                                        
               Petitioners have conceded that they substantially                      
          understated their income tax under section 6662(a) and (b)(2) for           
          each of the years at issue.  The sole issue remaining is whether            
          petitioners had reasonable cause for, and acted in good faith               
          with respect to, the understatements.  Petitioners argue that               
          they reasonably relied on Mr. Borrelli, and therefore the                   
          accuracy-related penalties under section 6662 do not apply.                 
               The taxpayer bears the burden of proving there was                     
          reasonable cause for an understatement of income tax and that he            
          or she acted in good faith with respect to the understatement.              
          Higbee v. Commissioner, 116 T.C. 438, 446 (2001); sec. 1.6664-              
          4(a), Income Tax Regs.  The determination of whether the 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           
          the professional.  Sec. 1.6664-4(b)(1), Income Tax Regs.                    
          Reasonable cause has been found when a taxpayer selects a                   
          competent tax adviser, supplies the adviser with all relevant               
          information, and consistent with ordinary business care and                 






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