- 57 -
on tax advice given by attorneys and C.P.A.'s held unreasonable
absent a showing that the taxpayers consulted any experts
regarding the bona fides of the transactions), affd. 904 F.2d
1011 (5th Cir. 1990), affd. 501 U.S. 868 (1991). Here we have
found that none of the advisers consulted by petitioners
possessed sufficient knowledge of the plastics recycling business
to render a competent opinion. See David v. Commissioner, 43
F.3d 788, 789-790 (2d Cir. 1995) (taxpayers' reliance on expert
advice not reasonable where expert lacks knowledge of business in
which taxpayers invested); Goldman v. Commissioner, 39 F.3d 402,
408 (2d Cir. 1994) (same). Accordingly, petitioners will not be
relieved of the negligence additions to tax based upon the
decisions in the Durrett and Chamberlain cases by the Court of
Appeals for the Fifth Circuit.4
5. Conclusion as to Negligence
Under the circumstances of these cases, petitioners failed
to exercise due care in claiming large deductions and tax credits
with respect to the Partnerships on their Federal income tax
returns. Petitioners did not reasonably rely upon the offering
memoranda, Becker, Green, or their tax return preparers, or in
4 Other cases cited by petitioners are inapplicable and
distinguishable for the following general, nonexclusive reasons:
(1) They involve far less sophisticated, if not unsophisticated,
taxpayers; (2) the reasonableness of the respective taxpayers'
reliance on expert advice was established in those cases on
grounds that do not exist here; and (3) the advice given was
within the adviser's area of expertise.
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