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proper tax liability, including the taxpayer’s reasonable and
good faith reliance on the advice of a professional such as an
accountant. See id. However, reliance on the advice of a
professional tax advisor does not necessarily establish
reasonable cause and good faith. Id. Particularly, reliance on
the advice of a tax professional is not reasonable when a
taxpayer fails to disclose a fact that he or she knows, or
reasonably should know, is relevant to the proper tax treatment
of an item. Sec. 1.6664-4(c)(1)(i), Income Tax Regs.
Petitioner has not demonstrated that any of her
underpayments are due to reasonable cause and good faith.
Petitioner did not mention her tip income to Mr. Nguyen during
his preparation of petitioner’s income tax returns. Although
petitioner may have believed that tip income was not taxable,
that belief is not reasonable. Petitioner has failed to
demonstrate that she acted with reasonable cause and good faith
with regard to any particular portion of the underpayments in
this case. Therefore, to the extent that we uphold respondent’s
determination of deficiencies for the years at issue, we conclude
that petitioner is liable for the section 6662(a) penalties.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: November 10, 2007