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partnership would have qualified for deductions under section
174.
The Court finds it notable that Mr. Meyers had no
educational background or experience in agricultural pursuits in
general, or jojoba plants in particular. At trial, petitioner
suggested that Mr. Meyers had a "major" client who commercially
produced alfalfa plants, and that this should have, in some way,
granted Mr. Meyers specialized knowledge in the area of
agricultural investments. When questioned by the Court about the
similarities between jojoba plants and alfalfa plants, petitioner
responded: "The principles are the same. It's a product that
grows in the ground and you plant it, you harvest it, you worry
about the logistics of feed, of fertilizer, of labor costs."
Petitioner made such assertions while, nevertheless, admitting
his knowledge that the important byproducts of alfalfa plants
differ from the important jojoba byproducts touted in the Blythe
II offering. Additionally, with all due respect to petitioner,
the Court feels certain that such a generalized analysis of the
agriculture business is not a reasonable or sufficient basis for
assessing the commercial prospects of growing jojoba plants.
There is no evidence in the record to suggest that
petitioners ever questioned Mr. Meyers about the facts and/or
legal analysis upon which he based his recommendations. Further,
the record is devoid of any evidence that petitioners asked Mr.
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