- 58 - United States, 72 AFTR 2d 93-6443, 93-2 USTC par. 50,585 (D. Ariz. 1993). This Court declined to sustain the negligence additions to tax in the Reile and Davis cases for reasons inapposite to the facts herein. In the Davis case, the taxpayers reasonably relied upon a "trusted and long-term adviser" who was independent of the investment venture, and the offering materials reviewed by the taxpayers did not reflect that the principals in the venture lacked experience in the pertinent line of business. In the Reile case, the taxpayers, a married couple, had only one year of college between them and characterized themselves as financial "dummies." In contrast to those cases, petitioners herein are well educated, sophisticated, and successful professional and business people. Their reliance on Becker, Steele, and/or Sprague with respect to the essential valuation issue and the economic viability and bona fides of the Partnership transactions was misplaced and inconsistent with Becker's disclosure of the limitations of his investigation. Although Blount did not talk to Becker, Sprague related to Blount the particulars of Becker's investigation. In addition, the offering memoranda disclosed that the Partnerships had no prior operating history and that the general partner had no prior experience in marketing recycling or similar equipment. Accordingly, petitioners' reliance on the Reile and Davis cases is misplaced.Page: Previous 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 Next
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