Case: Petitioners Unable to Establish Good Faith Reliance on Professional Advice Where Evidence Did Not Show Preparer Was Competent (T.C. Bench) (IRC §6664)

Petitioners did not meet the burden for establishing reasonable cause and good faith by relying on professional advice and were therefore liable for accuracy-related penalties, held the U.S. Tax Court in a bench opinion. Petitioners, a married couple, hired a tax preparer recommended by a family member to prepare their 2019 tax return, which reported various expenses related to their rental property business and wife’s nursing business that was not operational in 2019. After examining their 2019 return, the IRS assessed accuracy-related penalties pursuant to I.R.C. §6662(a). Petitioners argued that the accuracy-related penalties should not apply because they had established ...