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decisions in the Durrett and Chamberlain cases.12
5. Conclusion as to Negligence
Under the circumstances of these consolidated 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. We hold that petitioner did
not reasonably rely upon the offering memoranda, Tucker and
Becker, or in good faith investigate the underlying viability,
financial structure, and economics of the Partnership
transactions. We are unconvinced by the claim of petitioner, an
experienced business and science journalist and editor with a
leading national investigative news magazine, that he reasonably
failed to inquire about his investments and simply relied on the
offering circulars and Becker Co., despite warnings in the
offering circulars and explanations by Tucker and Becker about
the limitations of Becker's investigation. Petitioner knew or
should have known better. We hold, upon consideration of the
entire record, that petitioners are liable for the negligence
additions to tax under section 6653(a)(1) and (2) for the taxable
years at issue. Respondent is sustained on this issue.
12 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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