Robert D. and Patricia K. Kaliban, et al. - Page 34

                                               - 34 -                                                 
            Commissioner, 990 F.2d 893 (6th Cir. 1993), affg. Donahue v.                              
            Commissioner, T.C. Memo. 1991-181; 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);                               
            Marine v. Commissioner, 92 T.C. 958, 992-993 (1989), affd.                                
            without published opinion 921 F.2d 280 (9th Cir. 1991); McCrary                           
            v. Commissioner, 92 T.C. 827, 850 (1989); Rybak v. Commissioner,                          
            91 T.C. 524, 565 (1988).  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.  David v. Commissioner,                              
            supra, Goldman v. Commissioner, supra; Freytag v. Commissioner,                           
            supra; Beck v. Commissioner, 85 T.C. 557 (1985); Buck v.                                  
            Commissioner, supra; Lax v. Commissioner, T.C. Memo. 1994-329,                            
            affd. without published opinion 72 F.3d 123 (3d Cir. 1995); Sacks                         
            v. Commissioner, supra; Steerman v. Commissioner, T.C. Memo.                              
            1993-447; Rogers v. Commissioner, T.C. Memo. 1990-619; see Sann                           
            v. Commissioner, T.C. Memo. 1997-259 and the Plastics Recycling                           
            cases cited therein.                                                                      
                  Alter and Feinstein did not actively seek prospective                               
            investments for petitioners.  In addition to legal services, they                         
            provided a bookkeeping and cash management service.  They                                 
            received  petitioners' income and paid their bills (except for                            
            the Webers) and provided periodic financial statements.                                   




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