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Respondent determined a deficiency of $18,011 in petitioner's 2014 Federal income tax and an accuracy-related penalty of $3,602

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Respondent determined a deficiency of $18,011 in petitioner's 2014 Federal income tax and an accuracy-related penalty of $3,602. Petitioner concedes the tax deficiency. Accordingly, the issue for decision is whether petitioner is liable for the accuracy-related penalty.

During 2014 petitioner worked as a sales representative for two separate companies and received Forms W-2 reflecting wages totaling $127,858. In early 2015 he sent Pam Williams the following email ("Re: Matt Bell's w 2s") regarding preparation of his 2014 return:

My friend Jeremy Fox referred me. I told him that I have a tax guy - but he said you may be able to do better for me. I think he said you could look this over and give me an estimate of what I would get back, and then go from there? Please let me know! Thank you!
That same day Ms. Williams responded via email as follows:

I will be able to get you a refund of about $20,000. My fee will be 20% so approximately $4,000. If you like what I can do and you're willing to pay my fee then let me know and I will proceed. Since you're a friend of Jeremy's you pay me after you get the refund that I say I can get you. * * *
A 2014 Form 1040 was electronically filed in petitioner's name reporting wages of $127,858. Attached was a Schedule C under the business name Sales Lead Generation. The Schedule C reported gross receipts of $14,250 and total expenses of $68,477, resulting in a net loss of $54,227 which offset petitioner's reported wages. Also attached was a Schedule A claiming $29,728 for unreimbursed employee business expenses. Respondent disallowed the employee business expenses and the Schedule C expenses and imposed the accuracy-related penalty. Petitioner disagreed with the penalty because "the return was fraudulently prepared and filed by the tax return preparer without my consent."

Matthew Bell, a salesman, couldn’t have been expected to know that CPAs are explicitly prohibited from charging contingent fees for tax return preparation.*** But Pam Williams apparently is not a CPA, so that was the deal that she and Mr. Bell struck. Does it seem fair to you that the Tax Court came down so hard on him for his reliance on Ms. Williams?