- 51 -
The uncontroverted record establishes that petitioners
relied on Mr. Pennoni, who was the driving force behind the
planning of the annuity transactions and who assured petitioners
that there was a reasonable basis for the income tax reporting of
the private annuity transactions and the HouTex stock sale.
We conclude that, under the circumstances, petitioners’
reliance on Mr. Pennoni was reasonable, that petitioners had
reasonable cause for the underpayment, and that petitioners acted
in good faith with respect to the underpayment within the meaning
of section 6664(c)(1). Consequently, we hold that petitioners
are not liable for the section 6662 accuracy-related penalty.
III. Other Arguments
We have considered the remaining arguments of both parties
for results contrary to those expressed herein, and we conclude
that those arguments, to the extent not discussed above, are
without merit or that it is not necessary to reach those
arguments.
To reflect the foregoing,
Decisions will be entered
under Rule 155.
Page: Previous 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 Last modified: May 25, 2011