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Petitioners argue that they sought professional tax advice
for the preparation and filing of their 2001 return. Petitioners
presented no evidence of the competence or expertise of their
return preparers. Therefore, petitioners have failed to meet the
first prong of the Neonatology test. See G. Kierstead Family
Holdings Trust v. Commissioner, T.C. Memo. 2007-158.
Petitioners further argue that they provided their return
preparers with all their raw financial data. Petitioners’ 2001
return listed the amount realized on the sale of their residence
as $600,000 and the adjusted basis as $600,000. Neither of these
numbers is accurate. The gross proceeds were $800,000, the net
proceeds were $752,582, and the adjusted basis was either
$597,054 or $647,054. Furthermore, the return did not report any
amount with respect to the $500,000 of gross proceeds received
from the sale of the South Point Road lot. Considering these
major errors and omissions, either petitioners failed to provide
their preparers with the necessary information, or the preparers
lacked the expertise to properly file a Federal income tax
return.
Because petitioners failed to prove they reasonably relied
on a competent tax professional, and because they failed to
assert any other basis for relief, we hold that petitioners
are liable for an accuracy-related penalty under section 6662(a).
In reaching our holdings, we have considered all arguments
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