- 43 -
In summary, we reject petitioner's contention that he
reasonably expected to profit from the Sentinel recyclers and
that he reasonably relied on advice from Ulanoff, Burstein, WMDI
and Boylan & Evans. Rather, we conclude that petitioner failed
to exercise due care in claiming the deductions and tax credits
related to the purchase of the Sentinel recyclers. Accordingly,
petitioner is liable for the accuracy-related penalty under
section 6662(a) for negligence for 1989 and 1990.
E. Conclusion
Because we have found that a substantial valuation
misstatement and substantial understatement of income tax exist
for 1989, and further because we have found that petitioner was
negligent in both 1989 and 1990, petitioner is liable for the
accuracy-related penalties under section 6662(a) for 1989 and
1990 as determined by respondent.
To reflect the foregoing, as well as the parties'
Stipulation of Settled Issues,
Decisions will be entered for
respondent.
9(...continued)
invested in tax shelters including movies, real estate, cattle
breeding, coal mining, and computers, and that he and RRI, along
with certain other individuals and entities, specifically
including Miller, Bambara, and PI, were enjoined in the mid-
1980's by the U.S. District Court for the District of
Massachusetts in respect of what was determined to be an abusive
tax shelter involving the leasing of recycling equipment. See
1985-1 C.B. 671; see also sec. 7408.
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