- 35 -
Commissioner, supra; LaVerne v. Commissioner, 94 T.C. 637, 652-
653 (1990), affd. without published opinion 956 F.2d 274 (9th
Cir. 1992), affd. without published opinion sub nom. Cowles v.
Commissioner, 949 F.2d 401 (10th Cir. 1991). Pleas of reliance
have been rejected when neither the taxpayer nor the advisers
purportedly relied upon by the taxpayer knew anything about the
nontax business aspects of the contemplated venture. Freytag v.
Commissioner, supra; Beck v. Commissioner, 85 T.C. 557 (1985).
In his petition, petitioner contends that he was reasonable
in relying on: (1) The marketing opinion of Ulanoff; (2) the
technical opinion of Burstein; and (3) the legal opinions of WMDI
and Boylan & Evans, dated October 15, 1981, and December 1, 1982,
respectively. Respondent contends that petitioner was not
reasonable in relying on Ulanoff, Burstein, and members of WMDI
and Boylan & Evans because they were all investors in Sentinel
recyclers.
Petitioner's testimony at trial indicates that he did not
actually rely on the reports by Ulanoff and Burstein.
Specifically, petitioner testified:
I * * * hired [Ulanoff and Burstein] because I was told
to hire them. I really didn't need them to tell me
what the machine could do and the what -- the profit I
could make. * * * Elliot Miller told me this is the way
you do it. I did it.
Although petitioner contended in his petition that he relied on
Ulanoff and Burstein, petitioner did not argue this point at
trial. On brief, petitioner repeated: "I did not need Burstein
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