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the retail and manufacturing sides of the furniture industry with
whom he could discuss his new venture. Petitioner was well aware
of what was required for a businesslike approach in order to make
an informed investment.
Any investment advice that Corman provided to petitioner
about Mid Continent was based solely on Corman's reading of the
prospectus and his experience in other than oil and gas ventures.
But to accurately report the Mid Continent deductions and credits
for 1983 and 1984 required verifying facts outside and
independent of the documents presented to Corman. Petitioners
have not shown that it was Corman's responsibility to verify
those facts. See David v. Commissioner, 43 F.3d 788, 789 (2d
Cir. 1995), affg. T.C. Memo. 1993-621; Daugherty v. Commissioner,
78 T.C. 623, 641 (1982). Petitioners cannot avoid the negligence
additions to tax "merely because a tax adviser has read the
prospectus and advised that it is feasible from a tax
perspective, assuming the facts presented are true." Rogers v.
Commissioner, T.C. Memo. 1990-619; accord Novinger v.
Commissioner, T.C. Memo. 1991-289.
Petitioner argues that there was nothing about the
investment that put him on notice that "second-guessing" his
accountant's advice was necessary. The tax losses generated by
the investment were not "too good to be true", he argues. But
for $10,000 petitioner, a high tax bracket taxpayer, purchased
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