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We believe that a reasonable and prudent person, who was
earning over $200,000 a year at the time petitioner decided to
invest in Ridge Energy and who claims that he intended to earn a
profit from an investment of approximately $13,000 in certain
energy systems allegedly worth $1,485,000, would have independ-
ently investigated the potential profitability of such an invest-
ment or would have relied upon an adviser who had expertise in
such an investment to make such an investigation. This is
especially true in the case of petitioner who is highly educated,
lacks significant investment experience, and apparently has no
expertise in the area of energy systems.
Petitioners cite Reile v. Commissioner, T.C. Memo. 1992-488,
and Eubanks v. Commissioner, T.C. Memo. 1990-227, to support
their position that their reliance upon Mr. Amsterdam was reason-
able and prudent under the circumstances presented here. How-
ever, both of those cases are distinguishable from the facts in
this case. In the Reile case, we found that the taxpayers there
involved, one of whom had only a high school education and the
other of whom had one year of college and who invested solely on
the advice of their financial and tax adviser in a partnership
that was a tax shelter, were not liable for the additions to tax
under section 6653(a)(1) and (2) because they reasonably relied
on that adviser. Unlike the taxpayers in Reile v. Commissioner,
supra, petitioners are highly educated. In addition, unlike
petitioners' adviser Mr. Amsterdam, the adviser in the Reile case
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