- 16 -
her receipt of the payments now at issue.10 Because petitioner’s
failure to report those payments is the sole basis argued by
respondent to support the imposition of a penalty in this case,
petitioner has satisfied the second prong of the Neonatology
test.
Turning to the third prong of the Neonatology test, we
conclude that petitioner has demonstrated that she actually
relied in good faith on the advice of attorneys Miller and
Konvalinka. The issue in this case involves the tax consequences
that flow from construction by the Court of a portion of the MDA
that is ambiguous. Petitioner, who has no discernable expertise
in tax matters, relied on attorney Konvalinka, an experienced tax
attorney, for the preparation of her 2003 Federal income tax
return. Attorney Konvalinka arrived at his decision to advise
petitioner not to report the payments now at issue because they
were not alimony within the meaning of section 71(b) following
his consultation with attorney Miller. Attorney Miller had
represented petitioner in her divorce from Dr. Perkins.
10 Although respondent contends that no evidence was
introduced regarding when attorney Miller’s alleged consultation
with attorney Konvalinka occurred, we find attorney Miller’s
testimony sufficient to support a conclusion, logically derived
from the facts and circumstances of this case, that such
consultation was made prior to the filing of petitioner’s 2003
Federal income tax return on April 1, 2004. In addition, it is
only logical to conclude that such consultation took place after
petitioner disclosed the payments at issue in this case to
attorney Konvalinka.
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