Due to a paid preparer’s series of errors with a client’s tax return, the client was excused from a penalty.
A woman who had sold her stock in connection with a corporate redemption and received a check dated Jan. 4, 2012 and a statement with an Aug. 2011 payment date.
Her preparer incorrectly concluded the gain should be reported on her 2011 return and then failed to file that return, unbeknownst to the taxpayer.
The IRS came after her when it didn’t see the stock gain on her 2012 return and hit her with a 20% penalty.
The Tax Court disagreed, saying she exercised ordinary business care and prudence and relied in good faith on the advice of her preparer
Whitsett, TC Memo. 2017-100