- 11 -
on the alleged expertise of Lukensow and the promotional
materials was not reasonable or prudent. Pasternak v.
Commissioner, 990 F.2d 893, 902-903 (6th Cir. 1993), affg.
Donahue v. Commissioner, T.C. Memo. 1991-181; Klieger v.
Commissioner, T.C. Memo. 1992-734. Without any previous
investment experience, petitioners agreed to purchase $200,000
worth of assets and incur debt of $190,100 solely upon the
representations and promotional materials presented by Lukensow,
an individual they discovered in a newspaper advertisement.
Petitioners relied solely on Lukensow's representations as to his
expertise without any further research. They also relied on his
representations and the promotional material as to the legitimacy
of the container investment, without any further investigation,
although Lukensow, as a promoter, earned fees from the sale of
the container leasing program. Petitioners proceeded to invest
cash of nearly $10,000 and purported to incur liability for
approximately $190,100, hoping to save taxes at virtually no
cost to themselves, due to the refunds from the ITC carryback
claims.5
It is clear that petitioners were sheltering income
improperly with large deductions and small cash investments. For
5 Prior to the filing of their 1983 return, petitioners
had undergone an audit of their 1980 and 1981 income tax returns
in connection with an investment in the Universal Life Church and
had been assessed substantial deficiencies, interest, and
additions to tax in connection therewith.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011