- 599 -
transactions. It was not shown that any of IRA's other advisers
had knowledge or had been apprised of all the relevant facts.
See Collins v. Commissioner, 857 F.2d 1383 (9th Cir. 1988), affg.
Dister v. Commissioner, T.C. Memo. 1987-217; Zmuda v.
Commissioner, 731 F.2d 1417 (9th Cir. 1984). Although reasonable
reliance on the advice of professionals may be a defense to
negligence, IRA did not show that the reliance in the instant
cases was reasonable. See Freytag v. Commissioner, 89 T.C. 849,
888 (1987), affd. 904 F.2d 1011 (5th Cir. 1990), affd. 501 U.S.
868 (1991). Consequently, we sustain respondent's determinations
that IRA is liable for the addition to tax for negligence or
intentional disregard of rules or regulations under section
6653(a) for 1980, 1983, 1984, 1985, and 1986 on the underpayments
from the equipment leasing transaction adjustments. These
section 6653(a) additions include (1) an addition to tax under
section 6653(a) for 1980, (2) an addition to tax under section
6653(a)(1) and (2) for 1983, 1984, and 1985, and (3) an addition
to tax under section 6653(a)(1)(A) and (B) for 1986.
We also conclude that IRA failed to establish that it acted
reasonably and in good faith in claiming the disallowed 1985
capital losses (Issue 25) from its purported sales of various
assets to Kanter and Holding Co. As discussed previously, IRA
failed to show that section 267 was inapplicable or that the
sales were bona fide. Consequently, we sustain respondent's
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