HIco's accuracy-related penalty of more than $300,000 issued by the IRS, is the result of an underpayment under § 6664(a). However, there is no penalty if there is evidence of reasonable cause and good faith under § 6664(c)(1). Considering the hired CPA omitted Form 1099-MISC, this could constitute reasonable cause under Treasury Reg. § 1.6664-4(b)(1), however only if certain rules and requirements are met. HIco's situation is a case-by-case basis that the IRS will determine with the taxpayer's education, sophistication and business experience to determine whether the reliance on the CPA was reasonable and in good faith under Treasury Reg. § 1.6664-4(c)(1).

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