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in the offering memorandum, especially the discussions of high
writeoffs and risk of audit, should have alerted a prudent and
reasonable investor to the questionable nature of the promised
deductions and credits. See Collins v. Commissioner, 857 F.2d
1383, 1386 (9th Cir. 1988), affg. Dister v. Commissioner, T.C.
Memo. 1987-217; Sacks v. Commissioner, T.C. Memo. 1994-217, affd.
82 F.3d 918 (9th Cir. 1996). A reasonably prudent person would
not conclude without substantial investigation that the
Government was providing tax benefits so disproportionate to the
taxpayers' investment of their own capital.
2. Petitioner's Purported Reliance on Advisers
Petitioner contends that he reasonably relied upon Marcus
and Hefter as qualified advisers on this matter.
A taxpayer may avoid liability for the additions to tax
under section 6653(a)(1) and (2) if he or she reasonably relied
on competent professional advice. United States v. Boyle, 469
U.S. 241, 250-251 (1985); Freytag v. Commissioner, 89 T.C. 849,
888 (1987), affd. 904 F.2d 1011 (5th Cir. 1990), affd. 501 U.S.
868 (1991). Reliance on professional advice, standing alone, is
not an absolute defense to negligence, but rather a factor to be
considered. Freytag v. Commissioner, supra. For reliance on
professional advice to excuse a taxpayer from the negligence
additions to tax, the taxpayer must show that the professional
had the expertise and knowledge of the pertinent facts to provide
informed advice on the subject matter. David v. Commissioner, 43
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