- 47 -
independent of the Partnerships. In addition, the offering
memoranda disclosed that the Partnerships had no prior operating
history and the general partner had no prior experience in
marketing recycling or similar equipment.
Petitioners' position also is not supported by Evatt v.
Commissioner, T.C. Memo. 1992-368, Borrell v. Commissioner, T.C.
Memo. 1989-251, or Mollen v. United States, 72 AFTR 2d 93-6443,
93-2 USTC par. 50,585 (D. Ariz. 1993), cases in which the
negligence addition to tax was denied. In the Borrell case, the
taxpayer had nurtured and developed a trust in her adviser
through social activities with him and his family, and she knew
that the adviser's three daughters were partners in the venture
(the other two partners were the taxpayer and a hospital
administrator). No such relationship existed between petitioners
and Becker, and Snyder had not spoken to Miller in roughly 25
years. In the Evatt case, the taxpayer relied upon an attorney
and an accountant to convert his business to corporate form and
prepare his and the corporation's tax returns, matters well
within their areas of expertise. Here, petitioners relied on
Becker and Miller for matters beyond their area of expertise.
Accordingly, petitioners' reliance on the Borrell and Evatt cases
is misplaced.
In Mollen, the taxpayer was a medical doctor who specialized
in diabetes and who, on behalf of the Arizona Medical
Page: Previous 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 NextLast modified: May 25, 2011