Lee B. Arberg and Melissa A. Quinn - Page 45



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          defense, but it is a factor to be considered.  Freytag v.                   
          Commissioner, supra at 888.                                                 
               In order for this factor to be given dispositive weight, the           
          taxpayer claiming reliance on a professional must show, at                  
          minimum:  “(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, 115               
          T.C. 43, 99 (2000), affd. 299 F.3d 221 (3d Cir. 2002); see also,            
          e.g., Charlotte’s Office Boutique, Inc. v. Commissioner, 425 F.3d           
          1203, 1212 & n.8 (9th Cir. 2005) (quoting verbatim and with                 
          approval the above three-prong test), affg. 121 T.C. 89 (2003);             
          Westbrook v. Commissioner, 68 F.3d 868, 881 (5th Cir. 1995),                
          affg. T.C. Memo. 1993-634; Cramer v. Commissioner, 101 T.C. 225,            
          251 (1993), affd. 64 F.3d 1406 (9th Cir. 1995); Ma-Tran Corp. v.            
          Commissioner, 70 T.C. 158, 173 (1978); Pessin v. Commissioner, 59           
          T.C. 473, 489 (1972); Ellwest Stereo Theatres of Memphis, Inc. v.           
          Commissioner, T.C. Memo. 1995-610.                                          
               As previously indicated, section 7491(c) places the burden             
          of production on the Commissioner.  The notice of deficiency                
          issued to petitioners asserted applicability of the section                 
          6662(a) penalty on account of both negligence and/or substantial            
          understatement.  See sec. 6662(b).  Respondent on brief likewise            






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