- 54 -
published opinion 94 F.3d 651 (9th Cir. 1996); Chakales v.
Commissioner, T.C. Memo. 1994-408 (reliance on a long-term
adviser, who was a tax attorney and accountant, and who in turn
relied on a promoter of the venture, held unreasonable), affd. 79
F.3d 726 (8th Cir. 1996); Kozlowski v. Commissioner, T.C. Memo.
1993-430 (reliance on an adviser held unreasonable absent a
showing that the adviser understood the transaction and was
qualified to give an opinion whether it was bona fide), affd.
without published opinion 70 F.3d 1279 (9th Cir. 1995); Freytag
v. Commissioner, 89 T.C. 849 (1987) (reliance 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). Here we have found that neither Tucker nor
Becker, the advisers consulted by petitioner, possessed
sufficient knowledge of the plastics recycling business to render
a competent opinion. This circumstance has been deemed relevant
by the Court of Appeals for the Second Circuit, the court to
which appeal in these cases lies. See David v. Commissioner, 43
F.3d at 789-790 (taxpayers' reliance on expert advice not
reasonable where expert lacks knowledge of business in which
taxpayers invested); Goldman v. Commissioner, 39 F.3d at 408
(same). Accordingly, we shall not relieve petitioners of the
negligence additions to tax based upon the Court of Appeals'
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