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construction business remained consistent. Petitioners offered
no explanation for the reduced income tax reported on the returns
other than the change in return preparer. We cannot excuse a
taxpayer who makes little or no effort to discern whether the
person the taxpayer has chosen to prepare a return is competent
to give tax advice. We find that petitioners did not act in good
faith in relying on Mr. Borrelli’s advice.
Accordingly, we find that petitioners did not have
reasonable cause for, nor did they act in good faith with respect
to, the understatements of income tax. We therefore sustain
respondent’s determination that petitioners are liable for the
section 6662(a) penalty for each of the years at issue.
To reflect the foregoing and the concessions of the parties,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011