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investment in the Partnership and the operations
thereof. We recognize that you intend to include this
letter with your offering materials and we have
consented to that with the understanding that the
purpose in distributing it is to assist your offerees'
tax advisors in making their own analysis and not to
permit any prospective investor to rely upon our advice
in this matter. [Emphasis added.]
Accordingly, the tax opinion letter expressly indicated that
prospective investors such as petitioners were not to rely upon
the tax opinion letter. See Collins v. Commissioner, 857 F.2d
1383, 1386 (9th Cir. 1988), affg. Dister v. Commissioner, T.C.
Memo. 1987-217. The limited, technical opinion of tax counsel
expressed in this letter was not designed as advice upon which
taxpayers might rely and the opinion of counsel itself so states.
Petitioners' reliance on the Durrett and Chamberlain cases
is also misplaced. In those cases, the Court of Appeals for the
Fifth Circuit reversed this Court's imposition of the negligence
additions to tax in two nonplastics recycling cases. The
taxpayers in the Durrett and Chamberlain cases were among
thousands who invested in the First Western tax shelter program
involving alleged straddle transactions of forward contracts. In
the Durrett and Chamberlain cases, the Court of Appeals for the
Fifth Circuit concluded that the taxpayers reasonably relied upon
professional advice concerning tax matters. In other First
Western cases, however, the Courts of Appeals have affirmed
decisions of the Tax Court imposing negligence additions to tax.
See Foulds v. Commissioner, T.C. Memo. 1994-489 (the well-
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