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respondent audited a taxpayer who, petitioner believed, had
invested in Ridge Energy around 1981 and that that audit did not
give rise to additional taxes; (2) figures showing how a profit
was supposed to be earned; and (3) the identity of the chairman
of the board of Saxon Energy, who was a certified public accoun-
tant. There is no prospectus that is part of the trial record in
this case.6 Based on petitioner's incomplete description of the
contents of the prospectus that he testified he reviewed, we do
not find that it was reasonable and prudent to rely upon the
promotional materials in it in deciding to invest in Ridge
Energy. See, e.g., Marine v. Commissioner, 92 T.C. 958, 992-993
(1989), affd. without published opinion 921 F.2d 280 (9th Cir.
1991).
Although petitioner testified that he invested in Ridge
Energy with a good faith intention to make a profit, any such
subjective profit motive is not dispositive in deciding whether
he acted negligently, and the record does not establish that he
(or petitioner Judith A. Buck) made any independent investigation
to determine how that profit was to be derived. Instead, peti-
6 We note that petitioners attached to their trial memorandum
that the Court had filed in this case a document that purports to
be an "information memorandum" that apparently was prepared on
behalf of Saxon Energy and that was to be used "only by prospec-
tive lessees of Saxon Energy". Assuming arguendo that that
information memorandum were part of the trial record in this
case, we would not find that it was reasonable and prudent to
rely on it in deciding to invest in Ridge Energy. See, e.g.,
Marine v. Commissioner, 92 T.C. 958, 992-993 (1989), affd.
without published opinion 921 F.2d 280 (9th Cir. 1991).
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