- 19 - adjusted basis or valuations claimed on the returns and that such claims were made in good faith. Respondent's refusal to waive a section 6659 addition to tax is reviewable by this Court for abuse of discretion. Krause v. Commissioner, 99 T.C. at 179. Petitioner argues that he arrived at his valuation of the tapes by virtue of his relying on Geldbach and Andrews, and on an appraisal prepared by McGraw-Hill, in addition to representations made in the offering materials. He contends that such reliance was reasonable, and, therefore, respondent should have waived the section 6659 addition to tax. We have found that petitioner's reliance on the above was not reasonable because neither Geldbach nor Andrews had expertise in continuing medical education, the offering materials contained numerous disclaimers and stated that prior similar ventures had not been as successful as predicted, and petitioner did not perform any independent investigation into the history, experience, credibility, reputation, or finances of MSA or its promoters. Petitioners did not have a reasonable basis for the adjusted base or valuation claimed on their 1983 return with respect to their investment in MSA. The record does not establish an abuse of discretion on the part of respondent with respect to the addition to tax under section 6659. In addition, the record fails to indicate that petitioners ever requested a waiver from respondent pursuant to section 6659(e) until briefing afterPage: 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