- 12 -
MSA, both Geldbach and Southard were unknown to petitioner. We
cannot say that reliance on the advice of virtual strangers who
promoted MSA amounts to reasonable conduct. Such reliance is not
the type of activity that overcomes the additions to tax for
negligence or intentional disregard of the rules or regulations.
Patin v. Commissioner, 88 T.C. 1086, 1130 (1987), affd. without
published opinion 865 F.2d 1264 (5th Cir. 1989), affd. sub nom.
Gomberg v. Commissioner, 868 F.2d 865 (6th Cir. 1989), affd. sub
nom. Skeen v. Commissioner, 864 F.2d 93 (9th Cir. 1989), affd.
without published opinion sub nom. Hatheway v. Commissioner, 856
F.2d 186 (4th Cir. 1988).
Petitioner points to his reliance on the appraisal prepared
by McGraw-Hill as evidence of his reasonable and prudent conduct.
However, the appraisal was part and parcel of the memorandum and
may not be considered unbiased and independent information. In
addition, a thorough reading of the appraisal indicates that the
calculation of the fair market value of the tapes was based on
many assumptions, several of which are in direct conflict with
information provided elsewhere in the memorandum. Petitioner's
argument that the cost of an independent appraisal would have
been prohibitive is unconvincing. See Kirwan v. Commissioner,
T.C. Memo. 1994-520.
Petitioner cites Mollen v. United States, 72 AFTR2d 93-
6443), 93-2 USTC par. 50,585 (D. Ariz. 1993), in support of his
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011