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Booker reached his decisions independently when advising them.
We find that any reliance upon Booker's advice with respect to
Encore was not objectively reasonable.4
Contrary to petitioner's argument, this case is factually
distinguishable from Heasley v. Commissioner, supra, and we find
their efforts to analogize it to the Heasley case unpersuasive.
Like the instant case, the Heasley case involved, inter alia,
whether the taxpayers could be held liable for the negligence
penalty, as set forth in section 6653, after claiming various
deductions and an investment tax credit attributable to a failed
investment shelter. After we found for the Government, the Court
of Appeals for the Fifth Circuit reversed our opinion in Heasley,
explaining that our standard of review was too stringent in light
of the facts. Heasley v. Commissioner, 902 F.2d at 383. The
Court of Appeals in Heasley explained that the taxpayers in that
case did not act negligently because they honestly misunderstood
the law and the facts, relied on a financial adviser and an
accountant, and expended efforts to monitor their investment.
Id. at 384. In so explaining, the Court of Appeals stated that
moderate-income investors need not independently investigate
their investments and that such investors may rely on the
expertise of their financial advisers and accountants. Id. The
court further explained that unsophisticated investors need not
4See Brooke v. Commissioner, T.C. Memo. 1996-262.
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