9
the circumstances. Neely v. Commissioner, 85 T.C. 934, 947
(1985). Petitioners bear the burden of proving that no part of
the underpayment for the year in issue was due to negligence or
intentional disregard of rules or regulations. Rule 142(a);
Bixby v. Commissioner, 58 T.C. 757 (1972).
Petitioners contend that they exercised due care with
respect to their investment in the Barrister partnerships because
they reasonably relied upon the information contained in the
offering materials. Petitioners also contend that they were not
negligent because they reasonably expected that the partnerships
might be profitable. Petitioners do not assert that they relied
on any representations as to the tax treatment of the items
passed through to them by the partnerships; rather their argument
seems to be that if they were not imprudent in investing in the
partnerships, then they were not negligent in claiming the
deductions and investment tax credit basis flowing therefrom.
Assuming arguendo that we agreed with this conclusion,
petitioners have not established that they acted reasonably with
respect to their investments in Series 98 and Series 124.
Petitioner testified that he completed a substantial
evaluation of the potential profitability of the Barrister
partnerships. Petitioner, however, relied solely on the
information contained in the offering materials, particularly the
cash-flow analyses. Reliance on representations by insiders,
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