Richard and Arline Muller - Page 7

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          6662(d)(1)(A)(ii).3  Respondent’s burden of production with                 
          respect to this penalty has been satisfied.  See sec. 7491(c).              
               The section 6662(a) accuracy-related penalty does not apply            
          to any portion of the underpayment if the taxpayer demonstrates             
          that there was reasonable cause for such portion and the taxpayer           
          acted in good faith with respect to it (the good faith                      
          exception).  Sec. 6664(c)(1); sec. 1.6664-4(a), Income Tax Regs.            
               A taxpayer who reasonably relies upon the advice of a                  
          competent tax professional can avoid the imposition of the                  
          section 6662(a) penalty, if the taxpayer demonstrates that the              
          tax professional was supplied with sufficient information to                
          accurately prepare the taxpayer’s Federal income tax return.  See           
          United States v. Boyle, 469 U.S. 241 (1985); Schwalbach v.                  
          Commissioner, 111 T.C. 215 (1998).                                          
               Reliance on a tax adviser is not reasonable, however, where            
          the taxpayer has failed to disclose adequately “all necessary               
          information” affecting the computation of the taxpayer’s tax                
          liability.  Ellwest Stereo Theatres of Memphis, Inc. v.                     
          Commissioner, T.C. Memo. 1995-610.                                          
               Petitioners do not claim, and the record does not otherwise            
          indicate, that petitioners provided their return preparer with              

               3 Ten percent of the tax required to be shown on                       
          petitioners’ 2003 return is less than $5,000.  See sec.                     

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