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determination of reasonable cause and good faith “is made on a
case-by-case basis, taking into account all pertinent facts and
circumstances.” Sec. 1.6664-4(b)(1), Income Tax Regs.
Reliance upon the advice of a tax professional may, but does
not necessarily, establish reasonable cause and good faith for
the purpose of avoiding a section 6662(a) penalty. See United
States v. Boyle, 469 U.S. 241, 251 (1985) (“Reliance by a lay
person on a lawyer is of course common; but that reliance cannot
function as a substitute for compliance with an unambiguous
statute.”). Such reliance does not serve as an “absolute
defense”; it is merely a “factor to be considered.” Freytag v.
Commissioner, supra at 888. The caselaw sets forth the following
three requirements in order for a taxpayer to use reliance on a
tax professional to avoid liability for a section 6662(a)
penalty: (1) The adviser was a competent professional who had
sufficient expertise to justify reliance, (2) the taxpayer
provided necessary and accurate information to the tax adviser,
and (3) the taxpayer actually relied in good faith on the
adviser's advice. See Neonatology Associates, P.A. v.
Commissioner, 115 T.C. 43, 99 (2000), affd. 299 F.3d 221 (3d Cir.
2002).
In this case, the notice of deficiency included the
imposition of a $1,068.00 section 6662(a) penalty on the basis
that there was a substantial understatement of petitioner’s
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