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conclusions, seek a second opinion, or try to check the advice by
reviewing the tax code himself or herself. Id.
Mrs. Racine was not educated in U.S. tax law and decided to
seek professional assistance in preparing petitioners’ amended
return. She retained Richard Steinauer, a tax attorney with the
Isaacson law firm, and relied upon him to file accurately and
properly an amended return for 2000. There is nothing in the
record to indicate that it was unreasonable for Mrs. Racine to
accept this guidance and not seek a second opinion. See id.
(such a requirement would nullify the purpose of seeking the
advice of an expert in the first place). In addition,
petitioners filed their original tax return and amended tax
return at a time when cases involving realized gain on stock
purchased with third-party margin debt had yet to be litigated.11
Therefore this issue was novel at the time the returns were
filed, and we find that petitioners had reasonable cause and
acted in good faith in excluding the gain when they filed their
amended return. See Williams v. Commissioner, 123 T.C. 144
(2004) (no penalty imposed in case involving issue of first
impression and interrelationship between complex tax and
bankruptcy laws).
11Petitioners timely filed their return for 2000 and an
amended return in 2003, while the early cases involving the issue
of realized gain on stock purchased with third-party margin debt
were decided after 2003.
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