- 20 - Section 301.9100-3(b)(1), Proced. & Admin. Regs., defines reasonableness and good faith as follows: (b) Reasonable action and good faith.-- (1) In general.-- Except as provided in paragraphs (b)(3)(i) through (iii) of this section, a taxpayer is deemed to have acted reasonably and in good faith if the taxpayer– (i) Requests relief under this section before the failure to make the regulatory election is discovered by the Internal Revenue Service (IRS); (ii) Failed to make the election because of intervening events beyond the taxpayer’s control; (iii) Failed to make the election, because after exercising reasonable diligence (taking into account the taxpayer’s experience and the complexity of the return or issue), the taxpayer was unaware of the necessity for the election; (iv) Reasonably relied on the written advice of the Internal Revenue Service (IRS); or (v) Reasonably relied on a qualified tax professional, including a tax professional employed by the taxpayer, and the tax professional failed to make, or advise the taxpayer to make, the election. [Emphasis added.] The benchmarks for reasonableness and good faith in section 301.9100-3(b)(1), Proced. & Admin. Regs., are disjunctive; i.e., the taxpayer need satisfy only subdivision (i), (ii), (iii), (iv), or (v) in order to be deemed to have acted reasonably and in good faith. In the instant case, petitioner satisfies at least three of the regulation’s benchmarks. Regarding section 301.9100-3(b)(1)(i), Proced. & Admin. Regs., there is no question that petitioner requested reliefPage: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Next
Last modified: May 25, 2011