Leon and Belle Atkind - Page 13

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            published opinion 921 F.2d 280 (9th Cir. 1991); McCrary v.                                  
            Commissioner, 92 T.C. 827, 850 (1989); Rybak v. Commissioner, 91                            
            T.C. 524, 565 (1988).  We have rejected pleas of reliance when                              
            neither the taxpayer nor the advisers purportedly relied upon by                            
            the taxpayer knew anything about the nontax business aspects of                             
            the contemplated venture.  Beck v. Commissioner, 85 T.C. 557                                
            (1985); Flowers v. Commissioner, 80 T.C. 914 (1983); Steerman v.                            
            Commissioner, T.C. Memo. 1993-447.                                                          
                  Petitioner's investigation of the Hyannis transaction did                             
            not extend beyond discussions with Miller and Roberts and a                                 
            review of the offering memorandum.  Petitioner had met Miller,                              
            and Miller had urged him to consider Roberts' proposals.                                    
            Petitioner had taken no action on several deals proposed by                                 
            Roberts, but the plastics recycling idea interested him.                                    
            Moreover, petitioner testified that because he knew Miller                                  
            personally and had a lot of confidence in him, petitioner decided                           
            to look into the plastics recycling proposal.  Petitioner did not                           
            explain exactly why he had any confidence in Miller.  The record                            
            is devoid of any history of past dealings between petitioner and                            
            Miller on either a personal or professional basis.  Nonetheless,                            
            petitioner's purported confidence in Miller is petitioner's only                            
            explanation of his reason for considering the recycling proposal                            
            and for failing to make any investigation of Roberts.                                       
                  Petitioner indicated some interest when Roberts called about                          
            the plastics recycling deal, and a copy of the Hyannis offering                             
            memorandum was sent to petitioner.  Petitioner testified that he                            

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