Thomas E. and Joan A. Bennett - Page 20

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          from the negligence additions to tax, the reliance must be                  
          reasonable, in good faith, and based upon full disclosure.  Id.;            
          see Weis v. Commissioner, 94 T.C. 473, 487 (1990); Ewing v.                 
          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).                                  
               Reliance on representations by insiders, promoters, or                 
          offering materials has been held an inadequate defense to                   
          negligence.  LaVerne v. Commissioner, 94 T.C. 637, 652-653                  
          (1990), affd. without published opinion 956 F.2d 274 (9th Cir.              
          1992), affd. without published opinion sub nom. Cowles v.                   
          Commissioner, 949 F.2d 401 (10th Cir. 1991); Marine v.                      
          Commissioner, 92 T.C. 958, 992-993 (1989), affd. without                    
          published opinion 921 F.2d 280 (9th Cir. 1991); McCrary v.                  
          Commissioner, 92 T.C. 827, 850 (1989); Rybak v. Commissioner, 91            
          T.C. 524, 565 (1988).  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 here shows that petitioners' "adviser" in this              
          matter, Gallagher, possessed no special qualifications or                   
          professional skills in the recycling or plastics industries.                
          Gallagher testified that Bankers Trust's due diligence involved             




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