- 74 -
there is no direct evidence of any abuse of administrative
discretion. Haught v. Commissioner, supra; cf. Wynn v.
Commissioner, T.C. Memo. 1995-609; Klieger v. Commissioner, T.C.
Memo. 1992-734.
However, we do not decide this issue solely on petitioners'
failure timely to request waivers but, instead, we have
considered the issue on its merits.
Petitioners urge that they relied on the respective offering
materials and Becker, Steele, and/or Sprague in deciding on the
valuation claimed on their tax returns. Petitioners contend that
such reliance was reasonable, and, therefore, respondent should
have waived the section 6659 additions to tax. However, as we
explained above in finding petitioners liable for the negligence
additions to tax, petitioners' purported reliance on the offering
materials and their advisers was not reasonable.
The offering materials for the Partnerships contained
numerous warnings and caveats, including the likelihood that the
value placed on the recyclers would be challenged by the IRS as
being in excess of fair market value. Further, petitioners'
testimony raises doubts as to the extent to which they reviewed
the offering memoranda or sought to resolve the numerous issues
raised in the memoranda.
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