-33-
Little v. Commissioner, 106 F.3d at 1449-1451, 1451-1453. Osteen
does not affect our analysis in the instant case.
For completeness, we note that respondent’s reliance on
Sacks v. Commissioner, T.C. Memo. 1994-217, also is misplaced.
In Sacks, the taxpayers invested in a tax shelter, the prospectus
for which projected that in the first 3 years of the investment
the taxpayers would be able to deduct 350 percent of their cash
outlay. The prospectus prominently displayed the fact that the
investment had significant tax risks and could well be challenged
by the Internal Revenue Service. We held the taxpayers were
liable for the negligence additions to tax, and the Court of
Appeals affirmed. Sacks v. Commissioner, 82 F.3d 918 (9th Cir.
1996), affg. T.C. Memo. 1994-217. There is no indication in the
record in the instant case that petitioner’s deductions exceeded
his actual cash outlays or that petitioner engaged in his
videotape activity for any substantial tax reduction purpose.
We have held, supra, that petitioner did not engage in his
videotape activity for profit.
By the time of the years in issue, a reasonable and
ordinarily prudent person would have sought competent advice on
the deductibility of the expenses of this videotape activity.
Petitioner failed to make a reasonable attempt to do so. We
conclude, and we have found, on the basis of the preponderance of
the evidence, that petitioner was negligent and that the entire
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