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632, 635 (9th Cir. 1984), affg. T.C. Memo. 1982-337; Bixby v.
Commissioner, 58 T.C. 757, 791-792 (1972).
Petitioner maintains that he acted reasonably and with all
due care in claiming deductions and credits with respect to his
investment in MSA. In support thereof, petitioner argues: (1)
He relied on advice from an independent financial planner; (2) he
relied on an appraisal of the tapes prepared by a well known and
respected company; (3) he was familiar with the use of videos for
continuing professional education; (4) he did not have time
during 1983 to independently investigate each partnership he
invested in; and (5) he monitored his investment and filed suit
against those involved when MSA did not perform as expected.
Under certain circumstances, a taxpayer may avoid liability
for the additions to tax under section 6653(a) if reasonable
reliance on a competent professional advisor 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 advice
of a professional is not, standing alone, an absolute defense to
negligence, but rather a factor to be considered. Id. In order
for reliance on professional advice to excuse a taxpayer from the
negligence additions to tax, the reliance must be reasonable, in
good faith, and based upon full disclosure. Id.
A taxpayer's reliance on representations by insiders,
promoters, or offering materials has been found to be an
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