- 10 -
who are independent of the program, or they must otherwise
examine the validity of the program. See Marine v. Commissioner,
92 T.C. 958, 993 (1989), affd. without published opinion 921 F.2d
280 (9th Cir. 1991). Mr. Schenkman was not independent of the
FTI/Merit programs. He instead stood to profit from the business
generated by getting his clients into the FTI/Merit programs, and
he routinely advised his clients of that fact. Mr. Lincir
concededly knew that, in some fashion, Mr. Schenkman would earn
additional income by getting his clients into the program.
We do not accept the notion that petitioners are naive and
trusting individuals who were led astray by bad tax advice.
Petitioners have developed and maintained two successful
businesses. These businesses have generated millions of dollars
in sales and annual incomes for petitioners in the hundreds of
thousands of dollars. Moreover, in addition to being a
successful businessman, Mr. Lincir participated in precious metal
trading and real estate ventures. We conclude that petitioners
possessed enough experience and knowledge of business to have
known that they should have evaluated the substantial tax
deductions at issue more carefully.
On the record before us, petitioners have failed to show
that we should reject respondent's determined additions to tax
for negligence.
2. Section 6621(c) Additional Interest
Section 6621(c) (formerly section 6621(d)) provides for an
increase in the interest rate where there is a substantial
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011