Hotel Continental, Inc., Petitioner-appellant, v. Commissioner of Internal Revenue, Respondent-appellee, 113 F.3d 1241 (9th Cir. 1997)

MEMORANDUM^** 

The addition to tax under 26 U.S.C. § 6653(a) was "presumptively correct and must stand unless the taxpayer can establish that he was not negligent." Hall v. Commissioner, 729 F.2d 632, 635 (9th Cir. 1984). Appellant's theory, reliance on accountant's advice, was insufficient to overcome the presumption in this case. Appellant did not produce substantial evidence of the circumstances under which its executives received and relied on their accountant's advice. It offered no evidence that it provided its accountants with complete and accurate information and made at least a cursory review of the return in light of that. Appellant therefore did not meet its burden of showing reliance was reasonable. Skeen v. Commissioner, 864 F.2d 93, 96 (9th Cir. 1989); Accardo v. Commissioner, 942 F.2d 444, 452 (7th Cir. 1991).

The Tax Court properly denied application of 26 U.S.C. § 6653(b) (2) (B), because there was not substantial authority for the taxpayer's treatment or adequate disclosure of relevant facts.

AFFIRMED.