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(1) “the tax treatment of any item by the taxpayer if there is or
was substantial authority for such treatment”, sec.
6662(d)(2)(B)(i), or (2) any item if (a) “the relevant facts
affecting the item’s tax treatment are adequately disclosed in
the return or in a statement attached to the return”, sec.
6662(d)(2)(B)(ii)(I), and (b) “there is a reasonable basis for
the tax treatment of such item by the taxpayer”, sec.
6662(d)(2)(B)(ii)(II).
The accuracy-related penalty under section 6662(a) does not
apply to any portion of an underpayment if it is shown that there
was reasonable cause for, and that the taxpayer acted in good
faith with respect to, such portion. Sec. 6664(c)(1). The
determination of whether the taxpayer acted with reasonable cause
and in good faith depends on the pertinent facts and circum-
stances, including the taxpayer’s efforts to assess such tax-
payer’s proper tax liability, the knowledge and experience of the
taxpayer, and the reliance on the advice of a professional, such
as an accountant. Sec. 1.6664-4(b)(1), Income Tax Regs.
Petitioner concedes that she should have reported in the
2001 joint return the respective distributions that Sun Life,
A.G. Edwards, and American General made during 2001. Petitioner
does not dispute that the understatement of tax in the 2001 joint
return exceeds the greater of 10 percent of the tax required to
be shown in that return or $5,000. See sec. 6662(d)(1)(A). On
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