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offering materials. The Court of Appeals for the Ninth Circuit
reversed our imposition of the negligence additions to tax.
However, the prefaces to the offering memoranda for the
Partnerships herein warned prospective investors that the tax
opinion letter was not in final form, and was prepared for the
general partner, and that prospective investors should consult
their own professional advisers with respect to the tax benefits
and tax risks associated with the Partnership. The tax opinion
letter was addressed solely to the general partner and contained
the following opening disclaimer:
This opinion is provided to you for your individual
guidance. We expect that prospective investors will
rely upon their own professional advisors with respect
to all tax issues arising in connection with an
investment in the Partnership and the operations
thereof. We recognize that you intend to include this
letter with your offering materials and we have
consented to that with the understanding that the
purpose in distributing it is to assist your offerees'
and their tax advisors in making their own analysis and
not to permit any prospective investor to rely upon our
advice in this matter. [Emphasis added.]
Accordingly, both the offering memoranda and the tax opinion
letter expressly and unambiguously indicated that prospective
investors such as petitioners were not to rely upon the tax
opinion letter. See Collins v. Commissioner, supra. The
limited, technical opinion of tax counsel in these cases was not
designed as advice upon which taxpayers might rely and the
opinion of counsel itself so states.
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