Good-Faith Defense to Willfulness (as under the Internal Revenue Code) is a defense used by taxpayers when facing penalties for failure to comply with the Internal Revenue Code. This defense states that the taxpayer had a good-faith belief that the action taken was lawful, and thus, the taxpayer should not be held liable for the penalty. There are three types of Good-Faith Defense to Willfulness (as under the Internal Revenue Code): 1. Reasonable Cause: A taxpayer can rely on reasonable cause to establish a good-faith defense to willfulness if it can be shown that the taxpayer’s actions were based on reasonable and good-faith beliefs that the action taken was lawful. 2. Reliance on Professional Advice: A taxpayer can rely on professional advice to establish a good-faith defense to willfulness if it can be shown that the taxpayer acted in good faith and reasonably relied on professional advice. 3. Mistake of Fact: A taxpayer can rely on mistake of fact to establish a good-faith defense to willfulness if it can be shown that the taxpayer acted in good faith and that the mistake was reasonable based on the facts and circumstances.