David and Shirley Singer - Page 39

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          educated taxpayer failed to establish the substance of advice,              
          and the purported adviser lacked tax expertise), affd. without              
          published opinion 94 F.3d 651 (9th Cir. 1996); Chakales v.                  
          Commissioner, T.C. Memo. 1994-408 (reliance on long-term adviser,           
          who was a tax attorney and accountant, and who in turn relied on            
          a promoter of the venture, held unreasonable), affd. 79 F.3d 726            
          (8th Cir. 1996); Kozlowski v. Commissioner, T.C. Memo. 1993-430             
          (reliance on adviser held unreasonable absent a showing that the            
          adviser understood the transaction and was qualified to give an             
          opinion whether it was bona fide), affd. without published                  
          opinion 70 F.3d 1279 (9th Cir. 1995); Freytag v. Commissioner, 89           
          T.C. 849 (1987)(reliance on tax advice given by attorneys and               
          C.P.A.'s held unreasonable absent a showing that the taxpayers              
          consulted any experts regarding the bona fides of the                       
          transactions).                                                              
               Bach did not possess sufficient knowledge of the plastics or           
          recycling industries to render a competent opinion.  This fact              
          has been deemed relevant by the Court of Appeals for the Second             
          Circuit.  See David v. Commissioner, 43 F.3d at 789-790                     
          (taxpayers' reliance on expert advice not reasonable where expert           
          lacks knowledge of business in which taxpayers invested), affg.             
          T.C. Memo. 1993-621; Goldman v. Commissioner, 39 F.3d 402 (2d               
          Cir. 1994) (same), affg. T.C. Memo. 1993-480.  Accordingly,                 
          petitioners will not be relieved of the negligence additions to             






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