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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 relief
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