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Petitioners contend that they were not negligent because
they reasonably relied in good faith upon the advice of a
qualified, independent adviser, to whom they made full
disclosure. In addition, petitioners contend that they were not
negligent because they reasonably expected to make a profit from
their investment in Southeast or Esplanade. Respondent, on the
other hand, contends that petitioners were negligent because
their reliance on Stewart was not reasonable and they failed to
adequately or reasonably investigate the validity of the
underlying transactions or the value of the recyclers involved
with their investments.
Turning our attention first to the Hogards, we note that the
record contains no evidence that they, or either of them, relied
upon the advice of Stewart, or any other adviser. Respondent's
determination that they are liable for the addition to tax under
section 6653(a) is presumptively correct, and the burden is upon
the Hogards to prove otherwise. Rule 142(a); Neely v.
Commissioner, supra; Bixby v. Commissioner, supra. This they
have failed to do. Accordingly, respondent's determinations are
sustained with respect to the Hogards.
As for the Gilmores, Wilson, and G&W, under some
circumstances a taxpayer may avoid liability for the additions to
tax under section 6653(a) if reasonable reliance on a competent
professional adviser is shown. United States v. Boyle, 469 U.S.
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