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98-99; see sec. 1.6664-4(c)(1), Income Tax Regs. For a taxpayer
to reasonably rely on the advice of a professional, the taxpayer
must show: (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
98-99.
Petitioners argue they relied on the advice of a tax
professional in determining how to treat the legal fees.
However, petitioners did not call their tax professional as a
witness, nor did they introduce evidence which would allow the
Court to evaluate the tax professional’s expertise. Because
petitioners have not established their tax professional was a
competent professional who had sufficient expertise to justify
reliance, petitioners have not shown they acted with reasonable
cause and in good faith. See sec. 6664(c)(1); Neonatology
Associates, P.A. v. Commissioner, supra at 98-99.
Finally, petitioners’ argument that they should not be held
responsible for the accuracy-related penalty because they are
already being penalized by the AMT is without merit. This Court
has previously stated:
The unfortunate consequences of the AMT in various
circumstances have been litigated since shortly after
the adoption of the AMT. In many different contexts,
literal application of the AMT has led to a perceived
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