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deductions, and return reporting and that they appropriately
followed the advice and return reporting positions of those
professionals. Respondent, however, sees petitioners as
sophisticated and successful business people who understand
complex legal concepts in connection their Beneco business.
Respondent contends that petitioners should have known that the
positions they took on their returns were incorrect.
Respondent also points out that petitioners have conceded
their offshore leasing issue and the penalties determined with
respect to it and that those transactions reflected that
petitioners had a high tolerance for risk in their tax reporting.
In essence, respondent argues that petitioners were willing to
take aggressive tax reporting positions and that we should
consider that in evaluating petitioners’ other deductions and
reporting positions.
Petitioners claim to have relied upon their accountants for
the contribution and section 183 loss issues. Mr. Kramer
prepared petitioners’ returns for the years 1998 through 2001.
Petitioners each testified that they relied upon Mr. Kramer to
properly prepare their returns.
Petitioners’ Accuracy-Related Penalties for Their Noncash
Charitable Contribution Adjustments for the 1998, 1999, 2000, and
2001 Tax Years
Each couple conceded that they are liable for the accuracy-
related penalties with respect to their offshore leasing
transactions, a matter which affected their liabilities for
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Last modified: March 27, 2008