- 27 -
decedent's tax lawyer.12 That advice was also consistent with
the opinion of counsel set forth in the POM. We also note that,
at the time decedent made his investment, as our subsequent
discussion in respect of the addition to tax under section 6661
reveals, most of the pertinent decisions had not been handed down
so that there was at best a shortage of authority setting forth
legal principles governing the tax consequences arising from the
at-risk provisions of section 465.13
We think the foregoing circumstances meet the standard
established in United States v. Boyle, 469 U.S. 247, 251 (1985),
where the Supreme Court stated: "When an accountant or attorney
advises a taxpayer on a matter of tax law, such as whether a
liability exists, it is reasonable for the taxpayer to rely on
that advice."
12 Respondent objects to portions of Mr. Michaels'
testimony on the grounds of inadmissible hearsay. In many
respects, respondent's objections appear to be well taken.
Accordingly, we have confined our findings to those elements of
Mr. Michaels' testimony which clearly involve facts as to his
views and actions, and not to what others said. Under these
circumstances, we find it unnecessary to dissect Mr. Michaels'
testimony and detail the portions in respect of which
respondent's objection might be sustained. Respondent also
objects to the testimony of Mr. Michaels that he thought decedent
would be at risk as a legal conclusion. It is precisely that
conclusion for which decedent consulted Mr. Michaels. It is the
fact that it was rendered, and not its substantive correctness,
that we find relevant here.
13 See discussion in Andrews v. Commissioner, T.C. Memo.
1985-380 (no negligence under sec. 6653(a) because the fact that
a type of transaction was universally disapproved by courts not
clear at the time taxpayers entered into transaction).
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