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nom. Cowles v. Commissioner, 949 F.2d 401 (10th Cir. 1991);
Marine v. Commissioner, 92 T.C. 958, 992-993 (1989), affd.
without published opinion 921 F.2d 280 (9th Cir. 1991); McCrary
v. Commissioner, 92 T.C. 827, 850 (1989); Rybak v. Commissioner,
91 T.C. 524, 565 (1988). Reliance has also been rejected when
neither the taxpayer nor the advisers relied upon had knowledge
about the nontax business aspects of the contemplated venture.
Goldman v. Commissioner, supra; Freytag v. Commissioner, supra;
Beck v. Commissioner, 85 T.C. 557 (1985); Lax v. Commissioner,
T.C. Memo. 1994-329, affd. without published opinion 72 F.3d 123
(3d Cir. 1995); Steerman v. Commissioner, T.C. Memo. 1993-447;
Rogers v. Commissioner, T.C. Memo. 1990-619.
Petitioner argues that his investment approach was
reasonably prudent for a person of his sophistication and
circumstances. He describes himself as a person with a modest
net worth and no background or experience in tax matters.
Petitioner also explained that, at 50 years old, he was
unsophisticated and had not consulted an accountant or an
attorney up until his involvement in the energy device. He also
notes that his ex-wife prepared their 1980, 1981, and 1982
returns and that he relied on an accountant or his advisers in
the particulars of deciding whether to invest, the bona fides of
the investment, and the manner in which the transaction should be
reported to respondent.
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