Leon and Belle Atkind - Page 12

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            investigated the Sentinel EPE recyclers or knew anything about                              
            their value.  Petitioner essentially argues that he reasonably                              
            relied on the purported value of the Sentinel EPE recyclers set                             
            out in the offering memorandum and on the statements made by or                             
            on behalf of the promoters.                                                                 
                  Under some circumstances a taxpayer may avoid liability for                           
            the additions to tax under section 6653(a)(1) and (2) if                                    
            reasonable reliance on a competent professional adviser is shown.                           
            Freytag v. Commissioner, 89 T.C. 849, 888 (1987), affd. 904 F.2d                            
            1011 (5th Cir. 1990), affd. 501 U.S. 868 (1991).  Reliance on                               
            professional advice, standing alone, is not an absolute defense                             
            to negligence, but rather a factor to be considered.  Id.  In                               
            order for reliance on professional advice to excuse a taxpayer                              
            from the negligence additions to tax, the reliance must be                                  
            reasonable, in good faith, and based upon full disclosure.  Id.;                            
            see Weis v. Commissioner, 94 T.C. 473, 487 (1990); Ewing v.                                 
            Commissioner, 91 T.C. 396, 423-424 (1988), affd. without                                    
            published opinion 940 F.2d 1534 (9th Cir. 1991); Pritchett v.                               
            Commissioner, 63 T.C. 149, 174-175 (1974).                                                  
                  Reliance on representations by insiders, promoters, or                                
            offering materials has been held an inadequate defense to                                   
            negligence.  LaVerne v. Commissioner, 94 T.C. 637, 652-653                                  
            (1990), affd. without published opinion 956 F.2d 274 (9th Cir.                              
            1992), affd. without published opinion sub nom. Cowles v.                                   
            Commissioner, 949 F.2d 401 (10th Cir. 1991); Marine v.                                      
            Commissioner, 92 T.C. 958, 992-993 (1989), affd. without                                    



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