- 82 -- 82 -
spoke with Canno, who apparently had some knowledge of the
plastics industry, but the substance of Canno's purported
comments is doubtful, and he had only minimal information about
the transaction. At trial, Becker confirmed that in the end he
relied exclusively on PI, its personnel, and the offering
materials as to the value and purported uniqueness of the
machines. Hertan similarly relied on PI personnel and the
offering materials, in addition to Becker.
In support of their contention that they acted reasonably,
petitioners cite Mauerman v. Commissioner, 22 F.3d 1001 (10th
Cir. 1994), revg. T.C. Memo. 1993-23. However, the facts in the
Mauerman case are distinctly different from the facts of these
cases. In Mauerman, the Court of Appeals for the Tenth Circuit
held that the Commissioner had abused her discretion for not
waiving a section 6661 addition to tax. Like section 6659, a
section 6661 addition to tax may be waived by the Commissioner if
the taxpayer demonstrates that there was reasonable cause for his
underpayment and that he acted in good faith. Sec. 6661(c). The
taxpayer in Mauerman relied upon independent attorneys and
accountants for advice as to whether payments were properly
deductible or capitalized. The advice relied upon by the
taxpayer in Mauerman was within the scope of the advisers'
expertise, the interpretation of the tax laws as applied to
undisputed facts. In these cases, particularly with respect to
valuation, petitioners relied upon advice that was outside the
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