UNITED STATES OF AMERICA, PETITIONER V. ROBERT W. BOYLE, EXECUTOR OF THE ESTATE OF MYRA W. BOYLE, DECEASED No. 83-1266 In the Supreme Court of the United States October Term, 1983 On Writ of Certiorari to the United States Court of Appeals for the Seventh Circuit Brief for the United States TABLE OF CONTENTS Opinions below Jurisdiction Statutes involved Statement Summary of argument Argument: Where a tax return is in fact negligently filed late, the taxpayer's reliance upon an attorney to prepare the return for him does not constitute "reasonable cause" sufficient to defeat the late-filing penalty imposed by Section 6651(a)(1) A. When it is clear that a tax return must be filed, the taxpayer has a personal and nondelegable duty to file it on time, and reliance on a third party to do so cannot as a matter of law constitute "reasonable cause" for a late filing B. There is no merit to the justifications advanced by the court of appeals to support its result C. The availability of a "reliance on counsel" defense in situations of this sort is inconsistent with equitable enforcement of the internal revenue laws Conclusion OPINIONS BELOW The opinion of the court of appeals (Pet. App. 1a-16a) is reported at 710 F.2d 1251. The opinion of the district court (Pet. App. 21a-24a) is unofficially reported at 49 A.F.T.R.2D (P-H) Paragraph 148,514. JURISDICTION The judgment of the court of appeals (Pet. App. 17a-18a) was entered on June 24, 1983. A petition for rehearing was denied on October 11, 1983 (Pet. App. 19a-20a). On December 30, 1983, Justice Stevens extended the time within which to file a petition for a writ of certiorari to and including January 29, 1984 (a Sunday). The petition was filed on January 30, 1984, and was granted on March 26, 1984 (J.A. 55). The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). STATUTES INVOLVED The relevant portions of Sections 6018, 6075 and 6651 of the Internal Revenue Code of 1954 (26 U.S.C.) are set out in a statutory appendix (Pet. App. 25a-26a). QUESTIONS PRESENTED Section 6651(a)(1) of the Internal Revenue Code imposes an "(a) ddition to the tax," often referred to as a "penalty," for failure to file a tax return on time, "unless it is shown that such failure is due to reasonable cause and not due to willful neglect." The question presented is whether a taxpayer's reliance on an attorney to prepare a tax return for him constitutes "reasonable cause" sufficient to defeat the late-filing penalty, where the return is filed late in part because of the attorney's negligence. STATEMENT 1. Myra W. Boyle died on September 14, 1978. Her will named her son, respondent Robert W. Boyle, as executor of her estate. Pet. App. 2a. Respondent was 64 years old at the time of his appointment and was then employed as an engineer at a nuclear power plant (Pet. App. 13a; J.A. 34). He had previously worked for Hugh Boyle and Sons, Inc., a family-owned earth-moving business that employed 20 persons (Pet. App. 12a-13a). He was a shareholder of that company, and had served as its president from 1946 until the business was sold in 1975 (J.A. 34-35). As president of the family corporation, respondent had regularly signed corporate income tax returns prepared by the company's accountants (J.A. 36). He testified that he "ha(d) no idea" as to what the deadline for filing corporate tax returns was (id. at 37, 48). He was aware that there exists a specific date for filing individual income tax returns, but testified as to his ignorance of that date as well, appreciating only that individual returns are due "sometime in the spring" (id. at 36-37, 42, 48). He had served as executor of his father's estate some years earlier, but could not recall whether that estate had been required to file a federal estate tax return (id. at 37, 40, 48). Shortly after his mother's death, respondent retained Ronald Keyser of the law firm of Elliff, Keyser and Hallberg to serve as attorney for the estate (Pet. App. 2a). Keyser had practices law for 20 years specializing in real estate and probate law (J.A. 15, 51). In discussing respondent's duties as executor, Keyser advised that the estate would be required to file a federal estate tax return (id. at 23-24, 40, 48, 52). Keyser also told respondent that there existed a specific deadline for filing the return, and said he "would notify" respondent as to what the deadline was (id. at 15-16, 18-19, 48, 52). Respondent testified that he asked Keyser on several occasions what the filing date was, but was told only that he "would be notified in due course" (id. at 19, 48-49). /1/ Keyser did not recall having informed respondent of the exact due date (id. at 24-25, 52-53). Respondent provided Keyser with the records and information necessary to administer the estate, and left preparation of the estate tax return entirely up to Keyser (Pet. App. 2a-3a; J.A. 38-39, 40). Section 6075(a) of the Code /2/ provides that an estate tax return "shall be filed within 9 months after the date of the decedent's death." Since Myra Boyle died on September 14, 1978, respondent as executor was required to file an estate tax return on or before June 14, 1979. The return, however, was not filed until September 13, 1979, some three months late (Pet. App. 22a). Keyser testified that the practice in his law office was to "post" the due date for a return on a "master calendar" so that the responsible attorney could be alerted at least ten days before the filing deadline (J.A. 16, 46, 52). According to Keyser, the Boyle estate "was not listed upon said calendar and the reason for (its omission therefrom was) unknown to (him) or anyone else in (his law) firm" (ibid.). Keyser also testified that his firm had a "large workload" (id. at 52) and that his files for the Boyle estate had been misplaced temporarily in another attorney's office (id. at 16, 46, 52). Respondent did not ask Keyser about the status of the return until September 6, 1979, by which time the return was already 11 weeks overdue (Pet. App. 3a). 2. Section 6651(a)(1) imposes an "(a)ddition to the tax," often referred to as a "penalty," for failure to file a tax return (including an estate tax return on time. The penalty is 5 percent of the amount "required to be shown as tax on such return" for each month the return is delinquent, up to a maximum of 25 percent in the aggregate. The penalty is applicable unless the taxpayer demonstrates that his failure to file on time was "due to reasonable cause and not due to willful neglect" (ibid). A delay is due to reasonable cause "(i)f the taxpayer exercised ordinary business care and prudence and was nevertheless unable to file the return within the prescribed time." Treas. Reg. Section 301.6651-1(c)(1). The Commissioner determined that respondent had not shown "reasonable cause" for filing the return late. Invoking Section 6651(a)(1), the Commissioner accordingly asserted against the estate an addition to the estate tax, in the amount of $17,124, for the three months that the return was delinquent (Pet. App. 3a). /3/ Respondent paid the penalty and sued for a refund in the United States District Court for the Central District of Illinois, alleging that he had relied on Keyser to file a timely estate tax return and that such reliance constituted "reasonable cause" for the late filing (Pet. App. 22a-23a). The district court, on cross-motions for summary judgment, accepted respondent's argument. Although the court made no detailed findings of fact, it said that the facts of this case were "closely alligned (sic) to the facts" of Rohrabaugh v. United States, 611 F.2d 211, 217 (7th Cir. 1979), and relied on that decision in support of its result. Pet. App. 23a. 3. A divided panel of the Seventh Circuit affirmed (Pet. App. 1a-11a). The majority adhered to the standard set forth in Rohrabaugh, under which reliance on counsel constitutes "reasonable cause" for the late filing of a tax return if (Pet. App. 4a): (1) the taxpayer is unfamiliar with the tax 7 law; (2) the taxpayer makes full disclosure of all relevant facts to the attorney or accountant * * *; and (3) the taxpayer has exercised ordinary business care and prudence. Emphasizing that this was a facts-and-circumstances test, the majority held that respondent had shown "reasonable cause." It noted that, while Boyle had business experience, his experience "did not encompass the preparation or filing of tax returns and therefore would not support any inference that he, in fact, knew the filing deadline" (Pet. App. 4a). It found that respondent had made full disclsoure to the estate's attorney. And it held that respondent had exercised "ordinary business care and prudence" in hiring competent counsel, in maintaining contact with Keyser rather than "simply abandon(ing) the estate once he had delegated the legal functions," and in taking steps to ensure that the return was prepared promptly once he learned that the filing deadline had passed (id. at 4a-5a). The court distinguished its previous decisions that had rejected a "reliance on counsel" defense to the late-filing penalty, noting that the executor in those cases, while entrusting preparation of the estate tax return to an attorney, had actual knowledge of the return's due date (id. at 5a, citing Fleming v. United States, 648 F.2d 1122, 1126 (7th Cir. 1981), and United States v. Kroll, 547 F.2d 393 (7th Cir. 1977)). The court rejected as unpersuasive the reasoning of three other circuits, each of which "ha(d) unequivocally adopted a per se rule that reliance on counsel is not 'reasonable cause' within the meaning of (Section) 6651(a)(1)" (Pet. App. 5a, citing Millette and Associates, Inc. v. Commissioner, 594 F.2d 121 (5th Cir.), cert. denied, 444 U.S. 899 (1979); Estate of Lillehei v. Commissioner, 638 F.2d 65 (8th Cir. 1981); Ferrando v. United States, 245 F.2d 582 (9th Cir. 1957)). Judge Posner dissented (Pet. App. 12a-16a). He emphasized that respondent "knew he had to file an estate tax return (and) must have known that the return was due within a fixed period of time after the decedent's death" (id. at 13a). Under these circumstances, Judge Posner stated, "ordinary business care and prudence" required that a fiduciary with respondent's business experience at least ascertain what the filing deadline was (id. at 15a). If respondent were to pay the penalty, Judge Posner noted, he would almost certainly have a claim for reimbursement against his lawyer, "whose admitted negligence was the primary cause of the late filing" (id. at 16a). But instead of creating incentives for timely filing by shifting liability to the person who was at fault, the majority in Judge Posner's view improperly "adopt(ed) an approach that rewards both the active negligence of the lawyer and the passive negligence of his client" (ibid.). The government's petition for rehearing was denied (Pet. App. 19a-20a), with Judges Posner and Cudahy voting for rehearing en banc. SUMMARY OF ARGUMENT Section 6651(a)(1) imposes a civil penalty, technically an "addition to the tax," in order to protect the revenue. A taxpayer who files a return late can avoid the penalty only if he demonstrates two things. First, he must show that his failure to file on time is "not due to willful neglect." Second, he must show that his failure to file on time "is due to reasonable cause." If a taxpayer proves that he lacked business experience and acted in good faith, he will generally be able to satisfy the first prong of this test, i.e., to show that he did not act "willfully" in neglecting to file on time. But the taxpayer's subjective state of mind and individual business expertise are irrelevant in answering the question presented here -- whether his failure to file on time "is due to reasonable cause" within the meaning of Section 6651(a) (1). The regulations, whose validity is not challenged, set forth an objective, "reasonable man" test for this purpose. Under the regulations, a late filing is due to reasonable cause "(i)f the taxpayer exercised ordinary business care and prudence and was nevertheless unable to file the return within the prescribed time" (Treas. Reg. Section 301.6651-1(c)(1). An executor is a fiduciary charged with certain duties, among which is the duty to file tax returns on the estate's behalf. Section 6018(a) provides that "the executor shall make a return with respect to the estate tax," and Section 6075(a) provides that the estate tax return "shall be filed within 9 months after the date of the decedent's death." In discharging these duties -- as in discharging all his other fiduciary duties -- the executor is required "to manifest the care, skill, prudence, and diligence of an ordinarily prudent man engaged in similar business affairs." G. Bogert, The Law of Trusts And Trustees Section 541, at 157 (2d ed. 1978). The vast majority of courts that have considered the question have interpreted these provisions, correctly, to impose on executors a personal, nondelegable duty to file estate tax returns on time. Because this duty is personal and nondelegable, an executor cannot discharge it merely by entrusting the return's preparation to an agent. In order to show "ordinary business care and prudence," the executor must personally ascertain the due date of the return, and take steps to ensure that his agent prepares the return in time to file it when due. The court of appeals thus erred as a matter of law in holding that reliance on counsel, without more, constitutes "reasonable cause" for filing a return late. Respondent failed to ascertain the deadline for filing the return, and failed to exercise the requisite care to ensure that his lawyer prepared it on time. His negligence in these respects contributed to the return's delinquency and was incompatible with the exercise of "ordinary business care and prudence." What is more, the negligence of his agent must be attributed to him as principal, and thus cannot constitute "reasonable cause" for the late filing either. The court of appeals, in reaching a contrary result, reasoned by analogy to cases upholding the "reliance on counsel" defense where a taxpayer seeks an attorney's substantive legal advice. Those cases have no application here. It is of course well established that a taxpayer has "reasonable cause" for a late filing if he consults a competent attorney, is informed (for example) that a personal holding company return need not be filed, and relies in good faith on that advice. Respondent, however, did not seek, nor did he rely on Keyser's substantive legal advice. There was no question here that a return had to be filed; the only question was when it had to be filed, and Keyser said nothing about that to respondent one way or the other. Ascertaining a return's due date is not a complex task, and it is a task that all taxpayers, including fiduciaries like respondent, have a personal and nondelegable duty to perform. Assistance is available from the IRS by telephone for this purpose. In sustaining a "reliance on counsel" defense in these circumstances, the court of appeals' decision contravenes strong considerations of tax policy and common sense. By according dispositive weight to a taxpayer's unawareness of filing deadlines, it threatens our self-assessment system of taxation by encouraging ignorance of the law. And by permitting a taxpayer to escape the penalty by citing his agent's negligence, it prevents the IRS from collecting any penalty at all, even though a return has indisputably been filed late in violation of the Code. The right answer is to let the IRS collect its penalty, leaving the taxpayer free to seek reimbursement from his lawyer on grounds of malpractice or breach of fiduciary duty. "In this way," Judge Posner noted below, "proper incentives would be created to avoid a persistent problem in the enforcement of the tax laws" by having liability "come to rest on the person whose fault was primarily responsible" (Pet. App. 16a (Posner, J., dissenting)). ARGUMENT Where A Tax Return is in Fact Negligently Filed Late, The Taxpayer's Reliance Upon An Attorney To Prepare The Return For Him Does Not Constitute "Reasonable Cause" Sufficient to Defeat the Late-Filing Penalty Imposed By Section 6651(a)(1) Section 6651(a)(1) provides that "(i)n case of failure to file any return *** on the date prescribed therefor ***, there shall be added to the amount required to be shown as tax on such return 5 percent of the amount of such tax" for each month the return is delinquent, up to a maximum of 25 percent in the aggregate. The penalty covers the late filing of any tax return (including returns of income, gift, and estate tax) other than certain information returns. The penalty is applicable unless it is shown that (the) failure (to file on time) is due to reasonable cause and not due to willful neglect" (ibid.). The burden of proof is on the taxpayer to demonstrate both the absense of willful neglect and the presence of reasonable cause. Rubber Research, Inc. v.Commissioner, 422 F.2d 1402, 1407 (8th Cir. 1970) (Blackmun, J.); Logan Lumber Co. v. Commissioner, 365 F.2d 846, 853 (5th Cir. 1966); Ferrando v. United States, 245 F.2d 582, 587, 589 (9th Cir. 1957); Estate of Mayer v. Commissioner, 43 T.C. 403, 405 n.1 (1964), aff'd per curiam, 351 F.2d 617 (2d Cir. 1965), cert. denied, 383 U.S. 935 (1966). If the taxpayer fails to demonstrate "reasonable cause," imposition of the penalty is mandatory. /4/ The regulations provide that a late filing is due to reasonable cause if "the taxpayer exercised ordinary business care and prudence and was nevertheless unable to file the return within the prescribed time." Treas. Re. Section 301.6651-1(c)(1). This definition tracks the standard judicial definition of "reasonable cause" in tax cases (see, e.g., Southeastern Finance Co. v. Commissioner, 153 F.2d 205 (5th Cir. 1946)), and the validity of the regulation is not challenged here. Although the existence of reasonable cause is a question of fact, the elements that must be present to constitute reasonable cause involve questions of law. E.g., Haywood Lumber and Mining Co. v. Commissioner, 178 F.2d 769, 771-772 (2d Cir. 1950); Orient Inv. and Fin. Co. v. Commissioner, 166 F.2d 601, 604 (D.C. Cir. 1948). "(T)he test," as Judge Posner noted in dissent below (Pet. App. 12a), "is ordinary negligence." /5/ In the present case, it is obvious that, if respondent had undertaken to prepare the estate tax return himself, and if the facts were otherwise similar, the estate could not escape the late-filing penalty. Respondent knew that an estate tax return was required to be filed (J.A. 23-24, 40, 48, 52). He also knew that it had to be filed by some specific date (id. at 15-16, 18-19, 48, 52). Under these circumstances, "ordinary business care and prudence" would plainly have required him to find out what that date was, and see to it that the return was filed in timely fashion. It is well established that ignorance of a return's due date, standing alone, does not amount to "reasonable caust." E.g., Estate of DiRezza v. Commissioner, 78 T.C. 19, 33 (1982) (citing cases). Mere inadvertence is not enough either. E.g., Plunkett v. Commissioner, 118 F.2d 644, 650 (1st Cir. 1941) (citing cases). In short, if respondent had not entrusted preparation of the return to an agent, the Commissioner would unquestionably be entitled to collect the late-filing penalty. It is also obvious that the estate tax return involved here was, in fact, filed late because of negligence. Keyser's excuses for his dereliction boiled down to pleas of oversight and overwork (see J.A. 16, 46, 52). It is well established that such excuses are inconsistent with the exercise of "ordinary business care and prudence." See, e.g., 10 Mertens, Law of Federal Income Taxation Section 55.23, at 154 (J. Doheny ed. 1981). Indeed, the court below stated that Keyser's behavior was negligent. See Pet. App. 9a, 10a, 11a (Coffee, J., concurring); id. at 16a (Posner, J., dissenting). In short, if respondent himself had done what Keyser did, the Commissioner again would clearly be entitled to collect the late-filing penalty. The narrow question presented here, therefore, is whether the result should be any different solely because respondent chose to have the estate tax return prepared by somebody else. Stated somewhat more technically, the question is whether a taxpayer's reliance on an agency to prepare a tax return for him, standing alone, constitutes "reasonable cause" for filing the return late, where the taxpayer fails to ascertain the due date of the return, and where the return is in fact filed late because of negligence. The Code and regulations, the weight of judicial authority, strong considerations of tax policy and common sense alike dictate a negative answer to this question. A. When it is clear that a tax return must be filed, the taxpayer has a personal and nondelegable duty to file it on time, and reliance on a third party to do so cannot as a matter of law constitute "reasonable cause" for a late filing 1. Section 6011(a) generally provides that "any person made liable for any tax * * * shall make a return." Section 6061 provides that "any return * * * shall be signed" by the person required to make it. I.R.C. Section 6061; Treas. Reg. Sections 1.6061-1(a) (income tax returns), 25.6061-1 (gift tax returns), 31.6061-1 (employment tax returns). Section 6065 and its implementing regulations provide that, if a return is required to be verified under penalties of perjury, the return "shall be so verified by the person signing it." I.R.C. Section 6065; Treas. Reg. Sections 1.6065-1(a) (income tax returns), 25.6065-1 (gift tax returns), 31.6065(a)-1 (employment tax returns). The regulations permit a return to be executed by an agent on behalf of the taxpayer in certain circumstances. Treas. Reg. Sections 1.6061-1(a) and 1.6012-1(a)(5) (income tax returns), 31.6061-1 and 31.6011(a)-7(a) (employment tax returns). /6/ "Whenever a return is made by an agent it must be accompanied by a power of attorney * * * authorizing (the agent) to represent his principal in making, executing, or filing the return." Treas. Reg. Sections 1.6012-1(a)(5) (income tax returns), 31.6011(a)-7(a) (employment tax returns). The Code and reuglations specify the time for filing tax returns, providing in each instance that the return "shall be filed" by the specified date. I.R.C. Sections 6071-6076; Treas. Reg. Section 1.6071-1. These rules generally apply with equal force to executors of estates. An executor is a fiduciary charged with certain duties, one of which is the duty to file tax returns on the estate's behalf. Section 6018(a)(1) provides that "the executor shall make a return with respect to the estate tax." The regulations provide that the estate tax return "shall be signed by the executor" and must be *** verified" by him under penalties of perjury. Treas. Reg. Sections 20.6061-1, 20.6065-1(a). Section 6075(a) provides that estate tax returns "shall be filed within 9 months after the date of the decedent's death." The regulations emphasize that "(t)he estate tax return * * * must be filed on or before the due date" (Treas. Reg. Section 20.6075-1), and warn that the executor "may incur liability for * * * penalties" if the return is filed late (Treas. Reg. Sections 20.6061-1, 20.6075-1). /7/ The executor is also required to file a final income tax return on behalf of the decedent (I.R.C. Section 6012(b)(1)) and annual income tax returns on behalf of the estate (I.R.C. Section 6012(b)(4)), to sign (Treas. Reg. Section 1.6061-1(a)) and verify (Treas. Reg. Section 1.6065-1(a)) those returns, and to do so in timely fashion (I.R.C. Section 6072; Treas. Reg. Section 1.6072-1(a) and (b)). 2. The vast majority of courts that have considered the question have correctly interpreted these Code and regulatory provisions to impose on taxpayers (including executors) a personal, nondelegable duty to file tax returns on time. This interpretation has been explicitly adopted by the Fifth, /8/ Eighth /9/ and Ninth Circuits, /10/ by the Tax Court, /11/ and by numerous district courts. /12/ See Note, Late Filing of Federal Estate Tax Returns; Reliance on Attorney as Reasonable Cause, 32 Drake L. Rev. 157, 176 (1982-1983) (collecting cases); Note, Reasonable Cause for the Late Filing of Estate Tax Returns, 11 Ind. L. Rev. 621, 644 (1978) (collecting cases). The Seventh Circuit itself has held that , "when there is no question that a return must be filed, the taxpayer has a personal, nondelegable duty to file the tax return when due." United States v. Kroll, 547 F.2d 393, 396 (1977). Accord, Fleming v. United States, 648 F.2d 1122, 1125, 1126 (7th Cir. 1981). Contra, Rohrabaugh v. United States, 611 F.2d 211 (7th Cir. 1979). And while this Court has not addressed the question directly, it has observed that Congress "has made it the duty of the taxpayer" to comply with the Code's provisions respecting the filing of tax returns. Commissioner v. Lane-Wells Co., 321 U.S. 219, 223 (1944). /13/ Two conclusions necessarily follow from this premise. First, because the taxpayer's obligation to file on time is personal, he has a concomitant duty personally to ascertain what the filing is. "Any layman with the barest modicum of business experience knows that there is a deadling for the filing of returns" (Kroll, 547 F.2d at 396), and taxpayers (including executors) are presumed to know that tax returns have due dates. See, e.g., Ferrando, 245 F.2d at 586; Estate of Rapelje v. Commissioner, 73 T.C. 82, 89 n.7 (1979); Estate of Lillehei, 39 T.C.M. (CCH) at 520. In the exercise of "ordinary business care and prudence" (Treas. Reg. Section 301.6651-1(c)(1)), therefore, the taxpayer must inform himself of the filing deadline, since he otherwise will obviously be unable to ensure that his timely-filing obligation is met. Second, because the taxpayer's duty to file on time in nondelegable, he entrusts that task to someone else at his peril. Although a taxpayer may retain a lawyer, accountant, or other agent to prepare his return, he may not delegate away his obligation to file the return on time. Thus, if a taxpayer elects to employ an agent, it is the taxpayer's duty to "take appropriate steps to see to it that the delegate acts with diligence in fulfilling the filing obligation." Estate of Rapelje, 73 T.C. at 89-90. /14/ If the taxpayer fails to oversee his agent's activities, with the result that the return is filed late, the taxpayer's failure of oversight contributes to the return's delinquency and is incompatible with the exercise of "ordinary business care and prudence." If the agent acts negligently as well, his negligence, under hornbook agency law, is imputed to the taxpayer as principal, and thus cannot constitute "reasonable cause" for the return's late filing. See, e.g., Fleming, 648 F.2d at 1127 (citing Restatement (Second) of Agency Sections 9(3), 10, 272, 277 (1958)); Rohrabaugh, 611 F.2d at 220 (Swygert, J., dissenting); Dritz v. Commissioner, 28 T.C.M. (CCH) 874, 882 (1969), aff'd per curiam, 427 F.2d 1176 (5th Cir. 1970). See also 2 A. Scott, The Law of Trusts Section 171.1 (3d ed. 1967); 3 id. Section 225.1; Restatement (Second) of Agency Section 214 (1958). /15/ 3. Because an executor has a personal and nondelegable duty to file tax returns on time, the courts with near unanimity have held that his "reliance on an attorney to timely file the estate tax return, without more, is not enough to establish the exercise of ordinary business care and prudence." Estate of Lillehei, 39 T.C.M. (CCH) at 520. Accord, e.g., Boeving, 650 F.2d at 495; Fleming, 648 F.2d at 1125; Millette and Associates, Inc., 594 F.2d at 125; Estate of Duttenhofer v. Commissioner, 410 F.2d 302 (6th Cir. 1969), aff'g per curiam 49 T.C. 200, 204-205 (1967); Ferrando, 245 F.2d at 589; Daley, 480 F. Supp. at 811; Estate of Rapelje, 73 T.C. at 89. In order to demonstrate "ordinary business care and prudence," the executor must do more than simply hand things over to an attorney. He must personally acquaint himself with the deadling for filing the return, and he must take whatever steps are necessary to ensure that the attorney files the return on or before that date. Application of these principles to the instant facts shows that the court of appeals erred as a matter of law in sustaining respondent's "reliance on counsel" defense. Respondent knew that an estate tax return had to be filed and knew that it had to be filed by a certain date (J.A. 15-16, 18-19, 23-24, 40, 48, 52). He nevertheless failed to ascertain what the filing deadline was. Although he appears to have made desultory inquiries of Keyser (see J.A. 19, 48-49), he failed to exercise the care that an ordinarily careful and prudent businessman would exercise in ensuring that his tax return was timely prepared. And even if respondent's own behavior did not thus amount to "passive negligence" (Pet. App. 16a (Posner, J., dissenting)), the active negligence of his agent must be imputed to him as principal, and thus cannot constitute "reasonable cause" for his failure to file on time. B. There is no merit to the justifications advanced by the court of appeals to support its result The Seventh Circuit's decisions in this case and Rohrabaugh are the only recent appellant authorities that have sustained a "reliance on counsel" defense in the situation involved here. /16/ The court adduced three principal justifications to support its result. First, it reasoned by analogy to the "reliance on counsel" defense that is available when a client receives substantive tax advice from a lawyer. Second, it reasoned that an individual should be entitled to the defense where he lacks business expertise, particularly where he is unaware of the deadline for filing tax returns. Third, it suggested that the defense is appropriate where the return is an estate tax return, a document more remote from a layman's common experience. There is no merit to any of these theories. 1. It is of course well established that reliance on counsel may constitute a defense to various penalties -- including the negligence penalty (I.R.C. Section 6653(a)) and the miscellaneous penalties for failure to file returns or pay taxes (I.R.C. Sections 6651, 6652, 6671-6693) -- where the taxpayer seeks and relies on a lawyer's substantive legal advice. To be entitled to the defense, the taxpayer must show that he consulted a competent lawyer or other tax advisor; that he made full disclosure of all relevant facts; that the advisor affirmatively opined on the precise question at issue; and that the taxpayer actually relied, in good faith, on the advice thus given. /17/ If these conditions are met, it is usually irrelevant that the lawyer's advice turns out to have been wrong. These general principles apply no less to cases involving the late-filing penalty under Section 6651(a)(1). The courts have sustained a "reliance on counsel" defense to that penalty where a lawyer affirmatively advised that no return was required to be filed. /18/ They have sustained the defense where a lawyer gave advice, a necessary inference from which was that no return need be filed. /19/ And they have sustained the defense where the necessity of filing a return hinged on answers to complicated legal questions, the taxpayer consigned those questions to his tax advisor with instructions to prepare whatever returns were necessary, and the advisor indicated (explicitly or implicity) that no return was called for. /20/ The rationale of these cases is that, "if a taxpayer has used reasonable care to ascertain whether a return is required to be filed and has been advised by a qualified professional that a return need not be filed, he has done all that can be expected of him and * * * can rely on the advice so given" (Fleming, 648 F.2d at 1125 (footnote omitted)). The Seventh Circuit erred, both in this case (Pet. App. 4a) and in Rohrabaugh (611 F.2d at 214-215), in citing these cases to support its result. Respondent did not seek, nor did he rely on Keyser's substantive legal advice. It was clear to all concerned that an estate tax return had to be filed; "(t)he only question * * * was 'when' the return was due, and not 'whether' one was due" (Estate of Duttenhofer, 49 T.C. at 205). Respondent was not given erroneous advice concerning the filing date and, in any event, the question when an estate tax return is due does not "involv(e) a complicated area of tax law" (Estate of DiRezza, 78 T.C. at 35-36). Discovery of the filing deadline, obviously, was "not beyond the expertise of a lay person," and entailed no more than "a simple inquiry to an attorney or the IRS" (Daley, 480 F. Supp. at 813). Respondent's "only task with respect to filing was to read a calendar and to jot down * * * a single date" (Kroll, 547 F.2d at 395). For these reasons, the lower courts with near unanimity have held that the "reliance on counsel" doctrine has no application where (as here) it is clear that a return is due, and the taxpayer simply neglects to ascertain what the due date is. See, e.g., Fleming, 648 F.2d at 1125; Kroll, 547 F.2d at 395-396; Estate of Lammerts, 456 F.2d at 683; Richter, 440 F. Supp. at 923-924; Estate of DiRezza, 78 T.C. at 35-36; Paula Construction Co. v. Commissioner, 58 T.C. 1055, 1061 (1972), aff'd mem., 474 F.2d 1345 (5th Cir. 1973). Indeed, this conclusion follows inescapably from the principle (demonstrated above) that, "when there is no question that a return must be filed, the taxpayer has a personal, nondelegable duty to file" it on time (Kroll, 547 F.2d at 396). The court of appeals thus erred in upholding respondent's "reliance on counsel" defense in these circumstances. /21/ 2. The court of appeals also suggested, both here (Pet. App. 4a) and in Rohrabaugh (611 F.2d at 216), that reliance on counsel should be "reasonable cause" for filing a return late when the case involves "an inexperienced taxpayer with no knowledge of business affairs." The court emphasized in Rohrabaugh that the executor "had no business experience that would reveal to her that there is a deadline for the filing of estate tax returns" (611 F.2d at 216). The court noted below that, whereas respondent "had more business experience than the (executor) in Rohrabaugh," his experience "did not encompass the preparation or filing of tax returns and therefore would not support any inference that he, in fact, knew the filing deadline" (Pet. App. 4a). Indeed, the court in both cases held that the executor's ignorance of the filing date was the key criterion, distinguishing on this ground its previous decisions that had rejected the "reliance on counsel" defense. See Rohrabaugh, 611 F.2d at 216 (distinguishing Kroll, 547 F.2d at 395); Pet. App. 5a (distinguishing Fleming, 648 F.2d at 1126). Other courts that have upheld the defense have generally taken the same view. See, e.g., Boeving v. United States, 493 F. Supp. 665, 671 (E.D. Mo. 1980), rev'd, 650 F.2d 493 (8th Cir. 1981); Gray, 453 F. Supp. at 1359-1360; Giesen, 369 F. Supp. at 35-36; Staff v. United States, 80-1 U.S.T.C. (CCH) Paragraph 13,353 (W.D.N.Y. 1980). It may well be that a taxpayer's lack of business experience, particularly his ignorance of filing deadlines, would suffice to show that he did not act willfully in neglecting to file on time. In order to defeat the late-filing penalty, however, the taxpayer must satisfy a two-pronged test. He must show not only that his failure is "not due to reasonable cause" (I.R.C. Section 6651(a)(1); see page 11, supra). And in determining whether a delinquent filing "is due to reasonable cause," the taxpayer's individual experience is irrelevant. Both the regulations (the validity of which is not challenged here) and established fiduciary law set forth an objective, "reasonable man" test -- whether the executor "exercised ordinary business care and prudence" (Treas. Reg. Section 301.6651-1(c)(1). The question, therefore, is not whether respondent was actually unaware of the filing deadline, but whether an ordinarily careful and prudent businessman, knowing that a return had to be timely filed, would have remained unaware of the filing deadline. "One does not have to be a professional co-executor or a probate lawyer to know that taxes have to be paid when they are due" (Ferrando, 245 F.2d at 586). In making ignorance of the law the test, the decision below contravenes weighty considerations of tax policy. "The most compelling reason for rejecting the argument that absence of actual knowledge constitutes reasonable cause is that such a principle would undermine the effectiveness of our tax laws because it would encourage a taxpayer to remain uninformed" (Daley, 480 F. Supp. at 813). Congress has "made it the duty of the taxpayer to comply" with the Code's filing requirements in order to "implement() the system of self-assessment which is so largely the basis of our American scheme of income taxation." Commissioner v. Lane-Wells Co., 321 U.S. 219, 223 (1944). The court below acknowledged that, if respondent had informed himself of the filing deadling, the "reliance on counsel" defense would be unavailable notwithstanding his reliance on Keyser (Pet. App. 4a-5a; accord, Rohrabaugh, 611 F.2d at 216). The court's reasoning thus has the anomalous result of permitting an executor to escape liability by failing to discharge what is a basic fiduciary responsibility of all executors and a basic civic responsibility of all taxpayers -- ascertaining what their duties are and when those duties must be carried out. In making ignorance of the law the test, moreover, the decision below would have a deleterious impact on the attorney-client relationship, since it would encourage lawyers deliberately to keep their clients in the dark. That, indeed, may have been what happened here. Respondent testified that he repeatedly asked Keyser when the return was due, only to be repeatedly put off with assurances that he "would be notified in due course" (J.A. 19, 48-49). Still worse, the decision below might encourage collusion. Whether a client has actually been informed of a return's due date will typically be a fact known only to him and his lawyer. If his ignorance of that fact were to take on talismanic properties, the regrettable result would be a temptation to convenient lapses of recollection, to "desperately self-serving declarations by negligent lawyers" (Pet. App. 15a (Posner, J., dissenting)), or to outright duplicity. 3. As a final justification for upholding a "reliance on counsel" defense, the Seventh Circuit suggested in Rohrabaugh that the outcome should reflect the "difference between an income tax and a federal estate return insofar as presumed knowledge is concerned" (611 F.2d at 218 n.2). "The situation might be entirely different," the court suggested, "if filing an income tax return were involved," since "(e) veryone, except fiscal year taxpayers, has the same income tax deadline" (id. at 214). Estate tax returns, by contrast, have "a floating due date keyed to the timing of the death of a particular decedent" (ibid.). This reasoning is spurious. An executor is a fiduciary charged by law with certain duties. The position of executor "(is) not an honorary one;" it is generally assumed voluntarily; and it typically entitles its holder to "receive() a commission for fulfilling the concomitant obligations." Pfeiffer, 315 F. Supp. at 396. See Kroll, 547 F.2d at 396; Daley, 480 F. Supp. at 812. Among those obligations is the duty to file tax returns on behalf of the estate. This duty was imposed on respondent both by federal law (see pages 15-16, supra) and by Illinois probate law, under which "the duties of * * * executors include () the payment of claims against the estate, including all Federal estate taxes, prior to any distribution to legatees." In re Estate of Marks, 51 Ill. App. 3d 535, 539, 366 N.E.2D 1077, 1081 (1977). In discharging his duties, an executor is required (as any other fiduciary is required) "to manifest the care, skill, prudence, and diligence of an ordinarily prudent man engaged in similar business affairs." G. Bogert, The Law of Trusts and Trustees Section 541, at 157 (2d ed. 1978). See W. Prosser, Handbook of the Law of Torts Section 32, at 152-154 (4th ed. 1971). Under these circumstances, it is not too much to ask that an executor "at least ascertain what (his) obligations (are)" (Pfeiffer, 315 F. Supp. at 396). To ascertain the filing date of an estate tax return, an executor need not delve into the Internal Revenue Code. He need make only "a simple inquiry to an attorney or the IRS" (Daley, 480 F. Supp. at 813). The IRS issues several publications, available free of charge, that explain executors' responsibilities in filing tax returns, and every telephone book lists an IRS number (generally toll-free) where taxpayers can obtain this sort of simple tax information. State courts have not hesitated to uphold surcharges against executors and thier lawyers for losses occasioned by the late filing of tax returns, /22/ and there is no reason why a more lenient rule should prevail for federal tax purposes. There is a more fundamental flaw, however, in the court of appeals' suggestion that the availability of a "reliance on counsel" defense should depend on the type of tax return involved. It is basic to our self-assessment system of taxation that each taxpayer must inform himself of his filing obligations. This principle applies regardless of the kind of tax for which a person happens to be liable, and regardless of whether the return happens to be due on April 15th. Taxpayers using a fiscal year have a "floating due date" (Rohrabaugh, 611 F.2d at 214) for their income tax returns (I.R.C. Section 6072(a)). Individuals who employ maids or other domestic workers are required to file quarterly returns of social security tax (Treas. Reg. Section 31.6011(a)-1(a)(1) and (3)). Corporations using the calendar year must file their income tax returns by March 15th (I.R.C. Section 6072(b)). The courts have rejected "reliance on counsel" defenses to the late-filing penalty in these other areas, /23/ and there is no reason why there should be a special rule for executors. Congress certainly drew no such distinction in Section 6651(a)(1), but instead has treated all types of returns (other than certain information returns) alike in one comprehensive penalty provision (see page 10, supra). Unless there is some question about the obligation to file at all (see pages 23-26, supra), therefore, the type of return involved should make no difference in determining the application of the late-filing penalty. C. The availability of a "reliance on counsel" defense in situations of this sort is inconsistent with equitable enforcement of the internal revenue laws The view adopted by the majority of the courts of appeals, rejected by the Seventh Circuit below, is supported by sound considerations of tax policy. The government is entitled to receive its taxes when they are due. Congress enacted the "addition to the tax" for delinquent returns, not to punish taxpayers, but "'to protect the revenue.'" Logan Lumber Co., 365 F.2d at 854 and n.18 (quoting Plunkett v. Commissioner, 118 F.2d 644, 650 (1st Cir. 1941)). If taxpayers can escape the adverse consequences of filing returns late by relying on their agents' negligence, the inevitable effect will be to "blunt() the salutary objective of the penalty statute." Rohrabaugh, 611 F.2d at 220 (Swygert, J., dissenting). The majority view is likewise supported by common sense. Because the late-filing penalty is an "addition to the tax," it can be collected only from the person liable for the tax, and not from his agent. If the taxpayer can defeat the penalty by citing his agent's negligence, therefore, the government will not be able to collect the penalty from anyone, even though a return has indisputably been filed late -- and filed late negligently -- in violation of the Code. But "(t)here is no reason for the Government to bear the burden of (a) late filing * * * created by the taxpayer's own failure to exercise reasonable care or by his attorney's neglect" (Fleming, 648 F.2d at 1127 (Swygert, J., concurring)). The right answer is to let the IRS collect the penalty from the taxpayer, leaving the taxpayer free to seek reimbursement from his agent on grounds of malpractice or breach of fiduciary duty. See Fleming, 648 F.2d at 1127 (Swygert, J., concurring); Rohrabaugh, 611 F.2d at 220 (Swygert, J., dissenting); Sarto v. United States, 563 F. Supp. 476, 478 (N.D. Cal. 1983). Accord, Harris and Warner, Estate Late Filing Penalty Under Section 6651: New Stricter Interpretations, 57 Taxes 275, 280 (1979); Preston, Reliance-On-Attorney Defense to Late-Filing Penalty Increasingly Being Rejected by Courts, 9 Est. Plan. 280, 284 (1982). See Note, supra, 11 Ind. L. Rev. at 620-621. "In this way," Judge Posner noted below, "proper incentives would be created to avoid a persistent problem in the enforcement of the tax laws" by having liability "come to rest on the person whose fault was primarily responsible" (Pet. App. 16a). As among the IRS, the executor, and the attorney, the only party who one can say with assurance was not negligent in situations of this sort is the IRS. It would thus be an odd notion of equity to deprive the government of its penalty for a return nelgigently filed late, to let the passively-negligent executor have the use of the government's money, and to let the actively-negligent lawyer escape completely unscathed. If the IRS cannot collect the penalty, of course, the lawyer's negligence "has not hurt and may have benefited his client," so that he need fear no malpractice action (Pet. App. 12a (Posner, J., dissenting)). But public policy considerations surely do not favor "immuniz(ing) a negligent attorney from what appears to be an open and shut malpractice suit" (Rohrabaugh, 611 F.2d at 220 (Swygert, J., dissenting)). CONCLUSION The judgment of the court of appeals should be reversed. Respectfully submitted. REX E. LEE Solicitor General GLENN L. ARCHER, JR. Assistant Attorney General ALBERT G. LAUBER, JR. Assistant to the Solicitor General CARLETON D. POWELL JO-ANN HORN Attorneys JUNE 1984 /1/ The evidence was not entirely consistent on this point. In his two affidavits, respondent said that he "did on a number of occasions including late spring of 1979 specifically ask when the return was due" (J.A. 19, 48-49). In his deposition, however, he said that he did not ask Keyser when the return was due "until September * * * of 1979," that is, until after the filing deadline had already passed (J.A. 41). The district court did not make any findings on this issue. /2/ Unless otherwise noted, all statutory references are to the Internal Revenue Code of 1954 (26 U.S.C.), as amended (the Code or I.R.C.). /3/ The Commissioner also assessed the estate $1,326 in interest, at the then-prevailing annual rate of 6 percent, for the three-month period during which the estate tax payment was overdue. See I.R.C. Section 6601(a); 26 U.S.C. (Supp. V. 1981) 6621(b); Rev. Rul. 77-411, 1977-2 C.B. 480. Respondent did not contest the estate's liability for interest, and no question as to that liability is presented here. /4/ The langauge of Section 6651(a)(1) is derived, without substantial alteration, from Section 291 of the Internal Revenue Code of 1939, ch. 2, Section 291, 53 Stat. 88 (imposing addition to the tax for failure to file a return on time "unless it is shown that such failure is due to reasonable cause and not due to willful neglect"). Prior to the Revenue Act of 1936, ch. 690, 49 Stat. 1727, Section 291 imposed an addition to the tax for failure to file a return on time unless "a return (was) filed after such time and it (was) shown that the failure to file it was due to reasonable cause and not due to willful neglect." E.g., Revenue Act of 1934, ch. 277, Section 291, 48 Stat. 746; Revenue Act of 1932, ch. 209, Section 291, 47 Stat. 238; Revenue Act of 1928, ch. 852, Section 291, 45 Stat. 857. The effect of this earlier provision was to make imposition of the penalty mandatory where no return was ever filed, and to make the "reasonable cause" defense available only where a return was filed late. See Commissioner v. Lane-Wells Co., 321 U.S. 219, 224-225 and n.11 (1944). We have found no legislative history discussing any of these provisions. Prior to the Revenue Act of 1928, the penalty for late filing of tax returns was contained in Section 3176 of the Revised Statutes. As originally codified, that Section imposed a 50 percent addition to the tax "in case of a refusal or neglect * * * to make a list or return," and made imposition of the penalty mandatory "except in cases of sickness or absence." Rev. Stat. Section 3176 (1878 ed.). In 1916, the "sickness or absence" language was eliminated, and Section 3176 was amended to read much as the initial version of Section 291 did. Revenue Act of 1916, ch. 463, Section 16, 39 Stat. 775 (imposing 50 percent addition to the tax for failure to file a return on time "except that, when a return is voluntarily and without notice from the collector filed after such time and it is shown that the failure to file it was due to a reasonable cause and not to willful neglect, no such addition shall be made to the tax"). The language of subsequent versions of Section 3176 was substantially identical. Revenue Act of 1918, ch. 18, Section 1317, 40 Stat. 1148; Revenue Act of 1921, ch. 136, Section 1311, 42 Stat. 313. The committee reports on the 1916 Act do not discuss the reasons for the change. /5/ The Internal Revenue Service has enuniciated eight specific reasons for late filing of a return which, if established by the taxpayer to the satisfaction of the district director, will automatically be accepted as "reasonable cause." See (2 Audit) Internal Revenue Manual (CCH) Section 4350, Paragraph (24)22.2 (Aduit Technique Handbook), at 7633-79 et seq. (Mar. 20, 1980). These causes include unavoidable postal delays, the death or serious illness of the taxpayer or a member of his family, the taxpayer's reliance upon the erroneous advice of an IRS employee, the taxpayer's unavoidable absence, the Service's failure to furnish the taxpayer with the necessary forms in timely fashion, the destruction by casualty of the taxpayer's records or place of business, and the taxpayer's timely filing of his return with the wrong IRS office. /6/ In the case of income tax returns, a return may be executed by an agent if the taxpayer is unable to make a return "by reason of disease or injury" or "by reason of continuous absence from the United States" for a specified period, or if the taxpayer requests written permission from the district director and the latter "determines that good cause exists for permitting the return to be so made." Treas. Reg. Section 1.6012-1(a)(5). The regulations do not explicitly provide for execution of returns by agents in the case of estate and gift tax returns. See Treas. Reg. Sections 20.6061-1 (estate tax), 25.6061-1 (gift tax). /7/ Section 6081(a) provides that the Commissioner "may grant a reasonable extension of time," generally not to exceed six months, "for filing any return." The regulations provide that an extension of time to file an estate tax return may be granted, upon specified conditions, "(i)n case it is impossible or impracticable for the executor to file a reasonably complete return" within the prescribed time. Treas. Reg. Section 20.6081-1(a). Neither respondent nor his attorney requested an extension of time to file the estate tax return involved here. /8/ See Millette and Associates, Inc. V. Commissioner, 594 F.2d 121, 124-125, cert. denied, 444 U.S. 899 (1979) ("(T)he responsibility for assuring a timely filing is the taxpayer's."); Logan Lumber Co. v. Commissioner, 365 F.2d 846, 854 (1966) ("The federal tax statute has 'placed the responsibility for filing (of a) return on time squarely upon each and every taxpayer.'") (quoting Rice v. Commissioner, 14 T.C. 503, 509 (1950)). /9/ See Boeving v. United States, 650 F.2d 493, 495 (1981 ("The executor or executrix has a personal and nondelegable duty to file a timely return."). Accord, Estate of Kerber v. United States, 717 F.2d 454, 455 (1983), Etition for cert. pending, No. 83-1038; Crouse v. United States, 711 F.2d 102, 104 (1983); Smith v. United States, 702 F.2d 741, 743 (1983). /10/ See Ferrando v. United States, 245 F. 2d 582, 586, 589 (1957) ("'The filing of a tax return when due is a personal, nondelegable duty of the taxpayer; as a general proposition, it is no valid excuse for him to say that the matter was put in charge of an employee or accountant or attorney, no matter how trustworthy that person may be.'") (quoting Annot., 3 A.L.R.2D 619 (1948)). /11/ See, e.g., Estate of Lillehei v. Commissioner, 39 T.C.M. (CCH) 518, 520 (1979), aff'd per curiam, 638 F.2d 65 (8th Cir. 1981) ("An executor who is aware of the necessity of filing an estate tax return has a personal nondelegable duty to timely file that return."); Estate of Goff v. Commissioner, 37 T.C.M. (CCH) 199, 201 (1978) (same) (citing cases). /12/ See, e.g. Bonvicini v. United States, 83-1 U.S.T.C. (CCH) Paragraph 13,528 (D. Colo. 1983); Estate of Campbell v. United States, 449 F. Supp. 675, 680 (D.N.J. 1977) "(T)he duty to file a return when due is personal and nondelegable in cases where there is no question that a return must be filed."); Daley v. United States, 480 F. Supp. 808, 811 (D.N.D. 1979) ("(T)he duty to file the tax return is personal and may not be delegated."); Richter v. United States, 440 F. Supp. 921, 924 (D. Minn. 1977) ("(A)n executor has a nondelegable duty to file the tax return for the estate."). /13/ As suggested by the Seventh Circuit in Kroll and by other courts that have considered the issue (see pages 17-18 notes 11-12, supra), a different conclusion may be warranted where there is a question as to whether a return must be filed, e.g., where the obligation to file a return hinges on resolution of complicated legal questions about which a lawyer's advice is sought. See pages 23-26, infra. In the present case, there was no doubt that an estate tax return had to be filed (J.A. 23-24, 40, 48, 52), and respondent was aware of this fact (ibid.). /14/ Accord, e.g., Estate of Lillehei, 638 F.2d at 66; Millette and Associates, Inc. 594 F.2d at 124-125; Estate of Lammerts v. Commissioner, 456 F.2d 681, 683 (2nd Cir. 1972) (per curiam); Ferrando, 245 F.2d at 586-587; Daley, 480 F. Supp. at 812; Pfeiffer v. United States, 315 F. Supp. 392, 396 (E.D. Cal. 1970); Estate of DiRezza, 78 T.C. at 33; Estate of Duttenhofer v. Commissioner, 49 T.C. 200, 205 (1967), aff'd per curiam, 410 F.2d 302 (6th Cir. 1969); Estate of Geraci v. Commissioner, 32 T.C.M. (CCH) 424, 425 (1973), aff'd per curiam, 502 F.2d 1148 (6th Cir. 1974), cert. denied, 420 U.S. 992 (1975). /15/ It is generally true that the doctrine of agency would not operate to impute a lawyer's negligence to his client where the client seeks substantive legal advice and relies in good faith on advice erroneously given. See, e.g., Haywood Lumber And Mining Co. v. Commissioner, 178 F.2d 769, 771 (2d Cir. 1950) ("To impute to the taxpayer the mistakes of his consultant would be to penalize him for consulting an expert; for if he must take the benefit of his counsel's or accountant's advice cum onere, then he must be held to a standard of care which is not his own and one which, in most cases, would be far higher than that exacted of a layman."). But application of agency principles is completely approrpiate where (as here) the taxpayer does not seek substantive legal advice, but relies on his lawyer merely to discharge the taxpayer's personal and nondelegable duty to file a tax return on time. See pages 25-26, infra. /16/ As we have noted (pages 17-18, supra), that defense has repeatedly been rejected as a matter of law by the Fifth, Eighth and Ninth Circuits, and by other panels of the Seventh Circuit. Although the Sixth Circuit at one time countenanced the defense (see In re Fisk's Estate, 203 F.2d 358 (1953)), that case, involving a return mailed on the due date and received one day late, has largely been confined to its facts, as the Sixth Circuit has rejected the defense in more recent cases. See Estate of Geraci, 502 F.2d at 1149; Estate of Duttenhofer, 410 F.2d at 302. The Second Circuit has consistently rejected the defense where (as here) the taxpayer does not rely on his lawyer for substantive legal advice. See Estate of Lammerts, 456 F.2d at 683, distinguishing Haywood Lumber, 178 F.2d at 771; Estate of Mayer v. Commissioner, 351 F.2d 617 (1965), cert. denied, 383 U.S. 935 (1966). Although the defense has been sustained by several district courts, most of those decisions were either reversed on appeal (e.g., Boeving v. United States, 493 F. Supp. 665, 671 (E.D. Mo. 1980), rev'd, 650 F.2d 493 (8th Cir. 1981)), were rendered before the court of appeals had spoken definitively to the contrary (.e.g., Gray v. United States, 453 F. Supp. 1356 (W.D. Mo. 1978)), or were appealable to the Seventh Circuit (e.g., Giesen v. United States, 369 F. Supp. 33, 35-36 (W.D. Wis. 1973); Estate of Zavesky v. Commissioner, 42 T.C.M. (CCH) 1300, 1302-1303 (1981). /17/ Compare, e.g., Dayton Bronze Bearing Co. v. Gilligan, 281 F. 709, 712-713 (6th Cir. 1922) (sustaining defense), and Conlorez Corp. v. Commissioner, 51 T.C. 467, 475 (1968) (same), with Hanson v. Commissioner, 696 F.2d 1232, 1234 (9th Cir. 1982) (per curiam) (rejecting defense), Rubber Research, Inc. v. Commissioner, 422 F.2d 1402, 1407 (8th Cir. 1970) (Blackmun, J.) (same), Yale Avenue Corp. v. Commissioner, 58 T.C. 1062, 1076-1077 (1972) (same), and Van Dyke v. Commissioner, 45 T.C.M. (CCH) 1233, 1236-1237 (1983) (same). /18/ E.g., Commissioner v. American Ass'n of Engineers Employment, Inc., 204 F.2d 19, 20 (7th Cir. 1953) (lawyer advised that no income tax return was required because organization was tax-exempt); Estate of Christ v. Commissioner, 54 T.C. 493, 553-554 (1970), aff'd on other grounds, 480 F.2d 171 (9th Cir. 1973) (lawyer advised that no estate tax return was required because gross estate was less than specific exemption); Estate of Collino v. Commissioner, 25 T.C. 1026, 1036 (1956) (same). /19/ E.g., Nelson v. Commissioner, 19 T.C. 575, 581 (1952) (lawyer advised that corporate distribution was non-taxable return of capital). /20/ E.g., Haywood Lumber And Mining Co. v. Commissioner, 178 F.2d 769, 771 (2d Cir. 1950); Orient Inv. and Fin. Co. v. Commissioner, 166 F.2d 601, 603 (D.C. Cir. 1948); Hatfried, Inc. v. Commissioner, 162 F.2d 628, 632 (3d Cri. 1947); West Coast Ice Co. v. Commissioner, 49 T.C. 345, 351-352 (1968); Safety Tube Corp. v. Commissioner, 8 T.C. 757, 766-767 (1947), aff'd, 168 F.2d 787 (6th Cir. 1948). These cases all involved penalties for the late filing of personal holding company returns. A corporation is required to file such returns only if it meets the definition of a "personal holding company" (I.R.C. Section 541), a status that depends on answers to complex questions about the nature of its income (I.R.C. Section 543) and the ownership (constructive or direct) of its stock (I.R.C. Section 544). The IRS has ruled that the late-filing penalty "should not be asserted against a personal holding company in any case in which failure to file a timely (personal holding company tax return) is attributable to reliance in good faith upon the advice of a reputable accountant or attorney, experienced in Federal tax matters, and to whom all relevant information has been furnished." Rev. Rul. 172, 1953-2 C.B. 226. /21/ This Court need not here decide whether the "reliance on counsel" defense would be available to a taxpayer, notwithstanding his personal and nondelegable duty to file on time who is erroneously informed by his lawyer as to the filing date. See Pet. App. 15a (Posner, J., dissenting) (suggesting that defense might be available in such circumstances); Estate of Bradley v. Commissioner, 33 T.C.M. (CCH) 70, 72 (1974), aff'd mem., 511 F.2d 527 (6th Cir. 1975) (sustaining defense in such circumstances). Nor need the Court here decide whether the defense would be available to a taxpayer, notwithstanding his personal and nondelegable duty to file on time, who is erroneously informed by his lawyer that filing should be deferred past the normal due date because of extenuating circumstances, such as pending litigation. See, e.g., Northwestern Nat'l Bank v. United States, 30 A.F.T.R.2D (P-H) Paragraph 147,676 (D.S.D. 1972) (sustaining defense where lawyer advised delay in filing estate tax return pending outcome of state-court will contest); Estate of DiPalma v. Commissioner, 71 T.C. 324, 327 and n.3 (1978) (same); Estate of Crute v. Commissioner, 33 T.C.M. (CCH) 1073, 1075 (1974) (same). These questions are not presented here, because the attorney in this case knew the correct date for filing the return and did not say anything about it to respondent one way or the other (J.A. 15-16, 18-19, 24-25, 48, 52-53). /22/ See, e.g., In re Lohm Estate, 440 Pa. 268, 276-277, 269 A.2d 451, 455-456 (1970) (emphasis omitted): A prudent man may not have the technical knowledge or skill to prepare an estate tax return or even an income tax return, and so would properly rely on one more knowledgeable. But a prudent man in the conduct of his own affairs would certainly know that there is a time when a tax return must be made and a time when a tax is due and payable, and, if he did not know what those times were, he would find out. * * * We have difficulty in comprehending how, in this tax conscious age, an executor of an estate can with impunity be or remain ignorant of the time for filing tax returns or paying the taxes in the estate he is managing. The need to schedule the payment of bills, to plan for advance and final distributions, to do what is necessary to meet cash requirements by sales of assets or otherwise, to prepare for the time a final account can be filed and an estate can be wound up -- indeed all the principal aspects of an executor's job -- are related in a significant way to the time for the payment of taxes, be they state or federal or both, and to some approximation of the amounts thereof. /23/ E.g., Logan Lumber Co., 365 F.2d at 854 (corporate income tax return); Paula Construction Co., 58 T.C. at 1061 (small business corporation income tax return).