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caused by the excessive valuations of the underlying machinery in
the Partnership transactions, that petitioners lacked reasonable
cause for such overvaluation, and that each petitioner is
therefore liable for the negligence additions to tax under
section 6653(a). Accordingly, petitioners' reliance on the
Krause and Rousseau cases is misplaced.
In Mauerman, the Tenth Circuit Court of Appeals held that
the Commissioner had abused her discretion for not waiving a
section 6661 addition to tax. Like section 6659, a section 6661
addition to tax may be waived by the Commissioner if the taxpayer
demonstrates that there was reasonable cause for his underpayment
and that he acted in good faith. Sec. 6661(c). The taxpayer in
Mauerman relied upon independent attorneys and accountants for
advice as to whether payments were properly deductible or
capitalized. The advice relied upon by the taxpayer in Mauerman
was within the scope of the advisers' expertise, the
interpretation of the tax laws as applied to undisputed facts.
In these cases, particularly with respect to valuation,
petitioners relied upon advice that was outside the scope of
expertise and experience of their supposed advisers.
Consequently, we consider petitioners' reliance on the Mauerman
case inapplicable.
We hold that petitioners did not have a reasonable basis for
the adjusted bases or valuations reflected on their tax returns
with respect to their investments in Northeast and Hyannis. In
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