Good faith reliance on the advice of counsel or a qualified accountant can, in certain circumstances, be a defense to the accuracy-related penalty for negligence. See, e.g., Ewing v. Commissioner, 91 T.C. 396, 423–424, 1988 WL 89128 (1988), affd. without published opinion 940 F.2d 1534 (9th Cir.1991); Jackson v. Commissioner, 86 T.C. 492, 539–540, 1986 WL 22104 (1986), affd. 864 F.2d 1521 (10th Cir.1989); Pessin v. Commissioner, 59 T.C. 473, 489, 1972 WL 2491 (1972); Conlorez Corp. v. Commissioner, 51 T.C. 467, 475, 1968 WL 1580 (1968). In those cases, the taxpayer must establish: (1) The adviser had sufficient expertise to justify reliance, (2) the taxpayer provided necessary and accurate information to the adviser, and (3) the taxpayer actually relied in good faith on the adviser's judgment.

If a taxpayer shows good faith reliance upon the advice of a competent and experienced accountant or attorney in the preparation of the return, the addition to tax for negligence is inapplicable. Conlorez Corp. v. Commissioner, 51 T.C. 467, 474 (1968). To show good faith reliance, the taxpayer must establish that the return preparer was supplied with all necessary information and the incorrect return was a result of the preparer's mistakes.

If a taxpayer shows good faith reliance upon the advice of a competent and experienced accountant or attorney in the preparation of the return, the addition to tax for negligence is inapplicable. Conlorez Corp. v. Commissioner, 51 T.C. 467, 474 (1968). To show good faith reliance, the taxpayer must establish that the return preparer was supplied with all necessary information and the incorrect return was a result of the preparer's mistakes.

Where a taxpayer has relied upon the advice of a competent accountant, experienced in tax matters, to prepare his return, the Court has held inapplicable the addition to tax under section 6653 (a). See Conlorez Corp. v. Commissioner, 51 T.C. 467, 474 (1968). However, in cases accepting a "reliance" argument, the taxpayer has acted in good faith.

Where a taxpayer has relied upon the advice of a competent accountant, experienced in tax matters, to prepare his return, the Court has held inapplicable the addition to tax under section 6653(a). See Conlorez Corp. v. Commissioner, 51 T.C. 467, 474 (1968). However, in cases accepting a ‘reliance‘ argument, the taxpayer has acted in good faith.

It is true that under certain circumstances a good faith reliance on the advice of a tax advisor may constitute a defense to the addition to tax provided by section 6653(a). See Conlorez Corp. v. Commissioner Dec. 29,280, 51 T.C. 467, 475 (1968). Generally speaking, however, a taxpayer cannot avoid the responsibility of filing accurate income tax returns by relying upon an agent. Bailey v. Commissioner Dec. 20,146, 21 T.C. 678 (1954).

Petitioner, on whom the burden of proof rests, has presented no evidence on this point. Conlorez Corp., 51 T.C. 467, 473-474 (1968). We therefore hold for respondent.

Reasonable reliance on the advice of an expert suffices to avoid the negligence penalty. Conlorez Corp., 51 T.C. 467, 474-475 (1968); Leo A. Woodbury, 49 T.C. 180, 199-200 (1967). We sustain IVB on this issue.

Reasonable reliance on the advice of an expert suffices to avoid the negligence penalty. Conlorez Corp., 51 T.C. 467, 474-475 (1968); Leo A. Woodbury, 49 T.C. 180, 199-200 (1967). We sustain IVB on this issue.

With regard to condemnations, gain or loss must be computed and gain, at least, must be recognized at the time an estimated award is received by the owner of the property condemned if the net amount of the partial award exceeds the owner's adjusted basis in the property condemned, even though litigation to obtain additional compensation is still pending. See Conlorez Corp., 51 T.C. 467(1968). On the other hand, partial settlements are seldom received on insurance claims and gain or loss of property damaged or destroyed by casualty which is covered by insurance is not normally recognized until it can be ascertained with reasonable certainty whether the casualty loss will be fully compensated by insurance, which is usually when the claim for insurance is terminated by adjudication, settlement, or abandonment of the claim.