- 13 -
(1989); Rybak v. Commissioner, 91 T.C. 524, 565 (1988).
Additionally, when an investment has such obviously suspect tax
claims as to put a reasonable taxpayer under a duty of inquiry,
a good faith investigation of the underlying viability,
financial structure, and economics of the investment is
required. LaVerne v. Commissioner, supra at 652-653; Horn v.
Commissioner, 90 T.C. 908, 942 (1988).
In the instant case, petitioner claims that he relied on
several professional advisers with respect to his investment in
Southampton. Petitioner learned about the Southampton
investment program from Cunningham, a financial adviser who
encouraged petitioner to invest in a master recording lease.
Petitioner was aware, however, that Cunningham received a
commission if petitioner decided to invest in Southampton and
that Cunningham was serving as a salesman rather than an
independent adviser acting solely on petitioner's behalf.
Petitioner also argues that he relied on statements made by
Parnell, an enrolled agent who had reviewed the Southampton
promotional booklet. There is no evidence in the record that
Parnell relied on anything other than the materials furnished by
Southampton or that either Parnell or Cunningham had otherwise
investigated the bona fides of the master recording investment.
Similarly, there has been no showing that the accountants who
prepared petitioner's 1982 and 1983 tax returns evaluated the
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011