Paul L. and Doris J. Triemstra, et al. - Page 14

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          equal to 50 percent of the interest payable with respect to the             
          portion of the underpayment attributable to negligence.                     
          Negligence is defined as the failure to exercise the due care               
          that a reasonable and ordinarily prudent person would employ                
          under the circumstances.  Neely v. Commissioner, 85 T.C. 934, 947           
          (1985).  The question is whether a particular taxpayer's actions            
          in connection with the transactions were reasonable in light of             
          his experience and the nature of the investment or business.  See           
          Henry Schwartz Corp. v. Commissioner, 60 T.C. 728, 740 (1973).              
               When petitioners claimed the disallowed deductions and tax             
          credits, they had no knowledge of the plastics or recycling                 
          industries and no engineering or technical background.                      
          Petitioners did not independently investigate the Sentinel EPE              
          recyclers.  Petitioners contend that they were reasonable in                
          claiming deductions and credits with respect to Bellvine's                  
          investment in Northeast and attempt to distinguish their cases              
          from Provizer v. Commissioner, supra, by arguing that the                   
          circumstances of their investment were unique.  Petitioners                 
          contend that it was reasonable for them to rely on Roberts                  
          because:  (1) Kravitz had prior dealings with Roberts in real               
          estate matters, and (2) Roberts had waived his usual commission             
          for petitioners.                                                            
               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.           

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