- 28 -
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).
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. The record does not show that Efron possessed
any special qualifications or professional skills in the
recycling or plastics industries. In addition, Efron did not
hire anyone with plastics or recycling expertise to evaluate the
Clearwater transaction.
Petitioner testified that in 1981 he consulted with the
following individuals concerning investments: (1) Jeffrey
Jacobs, his attorney and agent; (2) Artie Brown, his accountant;
and (3) "other people * * * [who] came out of the woodwork and
offered [him] investments."
Efron was not petitioner's agent or attorney in 1981.
Petitioner met Efron through one of petitioner's teammates at a
cocktail party. Prior to petitioner's investment in EI, he and
Efron had only an acquaintance which petitioner described as a
"friendship type" of relationship. Although he had met Efron a
few times before investing in EI, he had not used Efron as an
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