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Petitioner argues that she was not motivated by tax savings in
making the investment and did not claim tax benefits "grossly
exceeding her investment".
Whether a taxpayer had a subjective profit motive may not be
dispositive in determining that she acted negligently. Klieger
v. Commissioner, T.C. Memo. 1992-734. Under some circumstances,
however, a taxpayer may avoid liability for the additions to tax
for negligence under section 6653(a) if reasonable reliance on a
competent professional adviser is shown. Freytag v.
Commissioner, 89 T.C. 849, 888 (1987), affd. 904 F.2d 1011 (5th
Cir. 1990), affd. 501 U.S. 868 (1991). Such reliance is not an
absolute defense to negligence but is merely a factor to be
considered. Id.
For reliance on professional advice to excuse a taxpayer
from the negligence additions to tax, the taxpayer must show that
the professional adviser had the expertise and knowledge of the
pertinent facts to provide informed advice on the subject matter.
Id.; Stone v. Commissioner, T.C. Memo. 1996-230; Reimann v.
Commissioner, T.C. Memo. 1996-84.
Petitioner has failed to introduce any evidence regarding
Russell's expertise in tax matters, that he knew anything about
the nontax business aspects of the recycling venture, or that he
conferred with experts in the field of plastics recycling.
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