- 11 - 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). We have rejected pleas of reliance when neither the taxpayer nor advisers purportedly relied upon 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). Petitioner essentially argues that he reasonably relied on the purported value of the tapes as set out in the offering materials and on statements made by Geldbach as to the legitimacy of the investment. In light of the size of his investment and the proportionately large tax write-offs, further investigation by petitioner was mandated. Saviano v. Commissioner, 765 F.2d 643, 654 (7th Cir. 1985), affg. 80 T.C. 955 (1983). While petitioner consulted with his accountant, he did so after making his investment, and after considering the information he received from Andrews and Geldbach. Andrews had no experience in continuing medical education or the use of tapes for that purpose and based his opinion that "due diligence" had been done simply on Geldbach's assurances. Moreover, prior to his investment inPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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