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information to the professional adviser. Weis v. Commissioner,
supra at 487; Pessin v. Commissioner, 59 T.C. 473, 489 (1972).
When considering the negligence addition, we must evaluate the
particular facts of each case, considering the relative
sophistication of the taxpayers, as well as the way in which they
approached their decisions. Vorsheck v. Commissioner, 933 F.2d
757, 759 (9th Cir. 1991); Levine v. Commissioner, T.C. Memo.
1995-362; Lucas v. Commissioner, T.C. Memo. 1995-341.
In these cases, petitioners contend that their actions were
reasonable because they relied upon Mr. Malis, a tax attorney and
certified public accountant, in using Pertinax and because the
corporate income tax returns were prepared by certified public
accountants.
Petitioners have not established that they fully informed
the preparers of all information that should have been taken into
account in preparing their returns. Mr. Malis did testify that
he drafted and revised the Management Agreement, but not that he
gave advice on tax matters. Although it must be regarded as
highly probable that, as general counsel of the various entities,
he offered such advice, the record does not so indicate, and we
do not know what his advice was. See Allen v. Commissioner,
supra at 354. In any case, and most importantly for our
purposes, petitioners cannot be regarded as lacking
sophistication, in view of the extensive business experience of
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