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investment clearly was required. A reasonably prudent person
would have asked a qualified independent tax adviser if this
windfall were not too good to be true. McCrary v. Commissioner,
92 T.C. 827, 850 (1989).
Petitioners contend that they were reasonable in claiming
deductions and credits with respect to EI's investment in
Clearwater. To support their contention, petitioners allege that
they were so-called unsophisticated investors and that in
claiming the deductions and credits, they relied on qualified
advisers. Wilson and Sorey each argue that their reliance on the
advice of Efron insulates them from the negligence additions to
tax. In addition, Wilson contends he relied on Paulson, his
offeree representative with respect to his investment in EI, and
Sorey contends that he relied on Cassaday, his banker, and Norman
Diamond, his accountant and offeree representative with respect
to EI. Wilson and Sorey argue that they are not liable for the
negligence additions to tax because of their reliance on those
individuals.
Under some circumstances a taxpayer may avoid liability for
the additions to tax for negligence under section 6653(a) 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
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