Tax Court Nixes Fraud Penalty After Biz Relied On CPA

Law360, New York (January 9, 2014, 8:26 PM EST) -- The U.S. Tax Court ruled Thursday that a California couple and their credit-card processing business were not liable for more than $400,000 in tax deficiencies and penalties for underreporting business income, finding there was no fraud, after they relied on their accountant's expertise.

The court held that David L. Carreon and his wife, Carrie Portugal Carreon, had relied on advice from their certified public accountant, John Betts, who set up an agent-principal relationship to oversee the Carreons’ personal and business accounts that ultimately resulted in the...
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