- 9 -
1998). In appropriate circumstances, nonetheless, a taxpayer's
reliance on his accountant's preparation of the return, including
the computations thereon, may constitute reasonable cause. See
Harrison v. Commissioner, supra; Drummond v. Commissioner, supra.
In order for a taxpayer's reliance on professional advice to
constitute reasonable cause to negate a section 6662(a) accuracy-
related penalty, the taxpayer must show that (1) the adviser was
a competent professional who had sufficient expertise to justify
reliance, (2) the taxpayer provided necessary and accurate
information to the adviser, and (3) the taxpayer actually relied
in good faith on the adviser's judgment. Neonatology Associates,
P.A. v. Commissioner, supra at 98; see also Charlotte's Office
Boutique, Inc. v. Commissioner, 425 F.3d 1203, 1212 & n.8 (9th
Cir. 2005), affg. 121 T.C. 89 (2003); Cramer v. Commissioner, 101
T.C. 225, 251 (1993), affd. 64 F.3d 1406 (9th Cir. 1995).
On the basis of our review of all the facts and
circumstances, we conclude that petitioner had reasonable cause
with respect to the substantial understatement in this case.
Except for the single error arising from the inadvertent double-
deducting of Windsor's officer compensation, OSG competently
prepared Windsor's and petitioner's returns for 2001; there is no
evidence of other defects in either, for the year in issue or
prior years. Thus, petitioner's reliance on OSG's competence was
reasonably justified. Windsor, which petitioner controlled,
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