Doctor Escapes Penalty for Inaccurate Returns by Proving Reliance on Return Preparer

Written by Reed Tinsley, CPA | June 13, 2017

The Tax Court held that a doctor was not liable for a 20 percent negligence penalty where she exercised ordinary business care and prudence by relying on her long-term tax return preparer, whom she believed to be a competent professional, to accurately report gain from a large stock sale on the appropriate year’s tax return. The court concluded that where a taxpayer is completely unaware of a return preparer’s numerous errors, those errors cannot be used retroactively to prove that the preparer is incompetent. Whitsett v. Comm’r, T.C. Memo. 2017-100.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.

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