-33-
the issue was novel as of the time that the taxpayers filed their
tax return for the year at issue there.7
We agree with petitioners that they are not liable for the
accuracy-related penalty at issue. Such an accuracy-related
penalty is not imposed upon any portion of an underpayment as to
which a taxpayer acted with reasonable cause and in good faith.
Sec. 6664(c)(1). Whether the taxpayer satisfies those tests is a
factual determination, where the taxpayer’s effort to assess the
taxpayer’s proper tax liability is a very important
consideration. Sec. 1.6664-4(b)(1), Income Tax Regs. Reliance
on the advice of a tax professional may constitute reasonable
cause and good faith if, under all facts and circumstances, the
reliance is reasonable and the taxpayer acted in good faith. See
Neonatology Associates, P.A. v. Commissioner, 115 T.C. 43, 98
7 Petitioners also argue at length that respondent’s
determination of the accuracy-related penalty is “null and void”.
This is so, petitioners assert, because the notice of deficiency
neither shows specifically that respondent considered the
reasonable cause exception of sec. 6664, nor explains why that
exception was determined not to be applicable to this case. As
petitioners see it, such a showing and explanation in the notice
of deficiency is required by the Omnibus Budget Reconciliation
Act of 1989 (OBRA), Pub. L. 101-239, 103 Stat. 2106, as discerned
from the legislative history thereunder (specifically, H. Rept.
101-247, at 1393 (1989)). We disagree with this argument. We
read nothing in OBRA that requires that the inclusion of an
accuracy-related penalty in a notice of deficiency, to be valid,
must be accompanied by a specific showing that respondent
considered the reasonable cause exception of sec. 6664 and an
explanation as to why that exception was determined to be
inapplicable. See also Facq v. Commissioner, T.C. Memo.
2006-111.
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