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claiming in their 1983 return the loss and credit with respect to
that partnership.4 We agree with respondent.
Claims of reasonable reliance upon an adviser have been
rejected when the adviser upon whom the taxpayer relied knows
nothing about the business in which that taxpayer invested.
E.g., Goldman v. Commissioner, 39 F.3d 402, 408 (2d Cir. 1994),
affg. T.C. Memo. 1993-480. Petitioners have failed to show that
Mr. Amsterdam, upon whom petitioner claims he relied, and/or Mr.
Coscia, the only person whom the record discloses Mr. Amsterdam
consulted about Ridge Energy, (1) knew anything about the energy
management activities of Ridge Energy, (2) had any investment or
other experience that qualified them to be in a position to
recommend that petitioner invest in Ridge Energy,5 (3) had, or
attempted to obtain, an appraisal of the energy systems leased by
that partnership; or (4) were not promoters for Saxon Energy.
Nor did petitioners establish that they otherwise took steps to
ensure themselves of the bona fides of investing in Ridge Energy.
Petitioner testified that Mr. Amsterdam gave him the
prospectus which petitioner reviewed and that that prospectus
contained, inter alia, (1) a statement from a law firm that
4 Respondent does not argue that petitioners are liable for the
additions to tax under sec. 6653(a)(1) and (2) because they
intentionally disregarded rules or regulations.
5 Indeed, petitioner testified that he was not aware whether or
not Mr. Amsterdam had any expertise in the area of energy manage-
ment systems.
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