- 51 -
to shelter income from taxation in 1979. While Mr. Heitzman was
not guilty of any wrongdoing in striving to minimize his tax
burden, he failed to ensure that he was not taking a frivolous
position in claiming the deductions. By his own admission, he
did no research and did not seek an opinion from independent tax
counsel either prior to his purchase of the interest or prior to
claiming the deductions on the 1979 return.19
Furthermore, the Stonehurst interest was entirely Mr.
Heitzman’s. He had all of the relevant information solely in his
possession--including the warning to seek the opinion of an
independent tax counsel--and he should have known that the
deductions were, to say the least, questionable. Petitioner was
privy to none of that information, and, as we have already found,
she had no reason to know of the understatement because Mr.
Heitzman had given her sufficient information to dispel any
disquiet she might have had under the circumstances. Friedman v.
Commissioner, 53 F.3d at 531; Foley v. Commissioner, supra.
Thus, we find that it would be inequitable, under the facts and
circumstances of this case, to hold petitioner liable for the
19 There is nothing in the record to indicate whether the
Alexander Grant income tax return preparers were apprised of
sufficient facts concerning Stonehurst to cause them to question
the deduction more closely. That issue is not relevant to this
case. What the record does reflect is that, as far as petitioner
was concerned, Alexander Grant had given the return its
imprimatur by preparing and signing it without comment. Cf.
Bokum v. Commissioner, 94 T.C. 126, 147-148, 156 (1990), affd. on
another ground 992 F.2d 1132 (11th Cir. 1993).
Page: Previous 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 NextLast modified: May 25, 2011