- 11 -
791-792 (1972). The addition to tax for negligence under
section 6653 may be correctly assessed in cases where claimed
deductions are not supported by the facts. Sandvall v.
Commissioner, 898 F.2d 455, 459 (5th Cir. 1990), affg. T.C.
Memo. 1989-56 and T.C. Memo. 1989-189; Marcello v. Commissioner,
380 F.2d 499 (5th Cir. 1967), affg. in part and remanding in
part 43 T.C. 168 (1964).
Petitioner maintains that he acted reasonably and with due
care in claiming deductions and credits with respect to his
investment in Southampton. In support thereof, petitioner
argues that: (1) He relied on promotional materials and
appraisals furnished by Southampton; (2) he relied on his
investment adviser and an enrolled agent who reviewed the
promotional materials; (3) he conducted his own investigation of
the music industry; (4) he monitored his investment through
correspondence with Indigo and Southampton; (5) he relied on
accountants who prepared his 1982 and 1983 tax returns; and (6)
he believed other investors had been successfully represented by
an attorney regarding the propriety of the tax treatment of
their Southampton investments.
Under some circumstances, a taxpayer may avoid liability
for the additions to tax under section 6653(a) if reasonable
reliance on a competent professional adviser is shown. Freytag
v. Commissioner, 89 T.C. 849, 888 (1987), affd. 904 F.2d 1011
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