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have any reason to suspect that the expert's advice may not be
disinterested. Rybak v. Commissioner, 91 T.C. 524, 565 (1988).
Under the standard applied by the Court of Appeals for the
Second Circuit in Goldman, it was negligent for petitioner to
rely on Mr. Coscia, his accountant, for advice on investments or
energy management systems absent evidence that Mr. Coscia held
some degree of expertise or specialized knowledge in these areas.
Petitioner failed to present any evidence that Mr. Coscia had
expertise in investments or knowledge of energy management
systems, and nothing in the record indicates that petitioner made
any attempt to ascertain the extent to which Mr. Coscia possessed
these skills before acting on his advice. In addition, although
petitioner was not aware that Mr. Coscia was being compensated by
Saxon Energy for bringing in Ridge Energy investors, petitioner
did know that Mr. Coscia himself and members of his family had
invested in Ridge Energy, which arguably affected Mr. Coscia's
ability to give disinterested advice on the investment.
Neither did petitioner independently investigate the bona
fides of the investment. At the time he made his initial capital
contribution, petitioner did not know the nature or function of
the equipment being marketed, the value of the equipment, the
identity of the lessor, the specifics of any leasing arrangement,
or how a profit was to be derived from such arrangement.
Petitioner did not request an appraisal of the equipment even
though it was the sole income-producing asset of Ridge Energy.
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