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expect no less from a well-educated and sophisticated individual
such as petitioner.
More importantly, it was not reasonable for petitioner to
claim tax benefits from his investment in Clearwater on the basis
of reliance on reports contained in the private offering
memorandum. We have long held as a general rule that a taxpayer
may not reasonably rely on the advice of the promoter of a tax
shelter with respect to the substantive merits or the tax
treatment of items in connection with that program. See Patin v.
Commissioner, 88 T.C. 1086, 1131 (1987), affd. without published
opinion 865 F.2d 1264 (5th Cir. 1989), affd. sub nom. Gomberg v.
Commissioner, 868 F.2d 865 (6th Cir. 1989), affd. sub nom. Skeen
v. Commissioner, 864 F.2d 93 (9th Cir. 1989), affd. per curiam
without published opinion sub nom. Hatheway v. Commissioner, 856
F.2d 186 (4th Cir. 1988); Klieger v. Commissioner, T.C. Memo.
1992-734. Such advice "is better classified as sales promotion".
Vojticek v. Commissioner, T.C. Memo. 1995-444.
Petitioners contend that it was reasonable for petitioner
not to look beyond the offering memorandum but to accept its
representations at face value because Federal and State
securities laws discourage false or misleading statements. We
find no merit in petitioners' argument.
First, in light of petitioner's educational background and
professional experience, we are not convinced that he would have
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