- 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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