- 29 -
to give such advice.2 Petitioner, in contrast, purports to have
relied upon the advice of an attorney and an accountant for the
value of a purportedly technologically advanced plastics
recycling machine and the economic viability of the Resource
transaction. Yet neither of petitioner's purported advisers had
any expertise in plastics materials or plastics recycling.
Further, petitioner did not learn whether the attorney had
researched or investigated Resource or received a commission for
the sale of a partnership share to him, and petitioner knew that
the accountant had not investigated or confirmed any of the
representations in the offering memorandum. We consider
petitioners' reliance on the Heasley, Sammons, Braddock, Ewing,
and Hill cases misplaced.
4. Conclusion as to Negligence
Under the circumstances of this case, petitioners failed to
exercise due care in claiming a large loss deduction and tax
2 The taxpayers in Sammons v. Commissioner, 838 F.2d 330, 337
(9th Cir. 1988), affg. in part and revg. in part T.C. Memo. 1986-
318, relied upon a "reasonably debatable" valuation by one of
five appraisers--two of whom were exceptionally qualified--for
the value of certain charitable deduction property. In Braddock
v. Commissioner, 95 T.C. 639 (1990), the taxpayers relied upon an
adviser who claimed tax expertise with respect to a reporting
issue that had never before been considered by any court, and the
answer to which was not entirely clear from the relevant
statutory language. The taxpayers in Ewing v. Commissioner, 91
T.C. 396 (1988), affd. without published opinion 940 F.2d 1534
(9th Cir. 1991), read and relied upon a tax opinion prepared by
an attorney who at least two of the taxpayers had known and
successfully dealt with for over 10 years. In Hill v.
Commissioner, T.C. Memo. 1993-454, the taxpayer relied upon an
independent evaluation by his long-time accountant and a
financial broker recommended by the accountant.
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