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as discussed above, was significantly involved in the financing
of EI.
Petitioners Wilson and Sorey contend that they relied
heavily on Efron in making their investments in EI and in
claiming the associated tax deductions and credits. Petitioners
argue that they should be relieved of the negligence additions to
tax under section 6653(a) because of their reliance on Efron.
Both Wilson and Sorey testified that they reviewed the original
offering memorandum and understood that EI was to invest solely
in real estate. They testified that in early 1982, after they
invested in EI, they learned that the nature of the EI investment
had changed from a strictly real estate deal to a deal including
a recycling investment. Although petitioners Wilson and Sorey
had an opportunity to read the revised offering memorandum, the
record indicates that they chose to spend little time on studying
the matter but chose, instead, to rely primarily upon the advice
of their advisers.
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
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