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Turning to the third prong of the Neonatology test, we note
that petitioner admitted at trial that he had not examined his
2002 tax return “closely enough.” Petitioner had a duty to read
his return to ensure that all income items were included. Magill
v. Commissioner, 70 T.C. 465, 479-480 (1978), affd. 651 F.2d 1233
(6th Cir. 1981). Petitioner was not permitted to bury his head
in the sand and ignore his obligation to ensure that his tax
return accurately reflected his income for the 2002 taxable year.
In the end, reliance on his accountant does not excuse
petitioner’s failure to closely examine his 2002 tax return.
To the extent that petitioner and/or his accountant might
have been confused by the fact that petitioner’s employer, Altana
Inc., issued two Forms W-2 for the 2002 taxable year rather than
one, they were free to contact petitioner’s employer to inquire
as to that issue. As was conceded by petitioner at trial,
neither petitioner nor his accountant contacted Altana, Inc.,
before filing petitioner’s 2002 tax return, in order to determine
why petitioner had been issued two Forms W-2 for the 2002 taxable
year. Given (1) the materiality of the large amount of
unreported Form W-2 income, (2) the fact that petitioner and his
accountant were both confused as to why petitioner had received
two Forms W-2, and (3) the fact that neither one of them made a
reasonable effort to resolve that issue, the Court cannot find
that petitioner relied in good faith on Mr. Beail’s advice.
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