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Petitioner contends that he reasonably relied on advice from
Mr. Kellen. Yet petitioner never consulted Mr. Kellen as an
attorney but rather as a friend and business associate; moreover,
petitioner characterized his dialogue with Mr. Kellen as
“chat”.24 Regardless, petitioner argues that Mr. Kellen was
qualified as an expert in jojoba. To the contrary, Mr. Kellen
did not consider himself to be an expert in jojoba in 1983, an
admission borne out by the record. In this regard, the record
establishes that Mr. Kellen became involved in the farming of
jojoba only in or about 1982, so his experience was limited, and
there is nothing to indicate that he was knowledgeable about
research and development of jojoba. See Kellen v. Commissioner,
supra; see also Freytag v. Commissioner, 89 T.C. at 888.
The record also establishes that Mr. Kellen was the general
partner and tax matters partner of four other jojoba
partnerships, including Utah Jojoba. See supra “B”. Mr. Kellen
was also the close personal friend and business associate of Mr.
Pace, the president and a director of U.S. Agri, which
24 To the extent that the “chat” was focused on any
particular matter, it appears to have focused on the profit
projections in the offering memorandum. However, the offering
memorandum specifically warned that such projections had been
prepared for the general partner, had not been audited, and
should not be relied on. See supra “H”. In addition, we have
previously found that Mr. Kellen’s “analysis” of San Nicholas was
not based on anything other than the projections set forth in the
offering memorandum. Kellen v. Commissioner, T.C. Memo. 2002-19;
see Tokarski v. Commissioner, 87 T.C. 74, 77 (1986).
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