- 5 -5
to negligence, but rather a factor to be considered. Freytag v.
Commissioner, supra at 888. A taxpayer's reliance on
professional advice is an acceptable excuse from the negligence
additions to tax where such reliance was reasonable. United
States v. Boyle, supra. Reliance on professional advice must be
objectively reasonable. Goldman v. Commissioner, 39 F.3d 402,
408 (2d Cir. 1994), affg. T.C. Memo. 1993-480.
Reliance on representations by insiders, promoters, or
offering materials generally is not an adequate defense to
negligence. Gollin v. Commissioner, T.C. Memo. 1996-454. A
taxpayer must be able to show that the adviser reached his or her
decision independently. Leonhart v. Commissioner, 414 F.2d 749
(4th Cir. 1969), affg. per curiam T.C. Memo. 1968-98. A taxpayer
ordinarily may not reasonably rely on someone with an inherent
conflict of interest. Goldman v. Commissioner, supra.
Petitioners contend they are not liable for negligence
additions to tax because they acted in a reasonable manner and
exercised ordinary business care and prudence with respect to
their participation in the Alamo partnerships. Further,
petitioners argue they reasonably relied upon the independent
advice of their attorney Jeffrey Hansen (Hansen) and their
accountant George Minger (Minger).
Based upon our review of the record, we find that
petitioners failed to prove that their actions were that of a
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011