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due care of a reasonable and ordinarily prudent person under like
circumstances to insure that his own compensation from Medico was
properly accounted for and reported.
The accuracy-related penalty does not apply to any part of
an underpayment of tax if it is shown the taxpayer acted with
reasonable cause and in good faith. Sec. 6664(c)(1). The
determination of whether a taxpayer acted in good faith is made
on a case-by-case basis, taking into account all the pertinent
facts and circumstances. Sec. 1.6664-4(b)(1), Income Tax Regs.
Generally, the most important factor is the extent of the
taxpayer’s effort to assess his proper tax liability. Id. The
taxpayer bears the burden of proof that he had reasonable cause
and acted in good faith with respect to the underpayment. Higbee
v. Commissioner, supra at 447.
Petitioners defend against the accuracy-related penalty on
the ground that they acted with reasonable cause and in good
faith. They argue that the penalty should not apply because they
relied on the advice of Mr. Loeser, a certified public accountant
with extensive experience in preparing tax returns.
The general rule is that a taxpayer has a duty to file a
complete and accurate tax return and cannot avoid that duty by
placing responsibility with an agent. United States v. Boyle,
469 U.S. 241, 252 (1985); Metra Chem Corp. v. Commissioner, 88
T.C. 654, 662 (1987). In limited situations, the good faith
reliance on the advice of an independent, competent professional
in the preparation of the tax return can satisfy the reasonable
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