- 35 -
At trial, petitioner admitted understanding that if he
invested in Whitman, then Winer, as promoter, would receive a
commission based on petitioner’s purchase of an interest in the
partnership. Petitioner also admitted that he looked at the
offering memorandum and therefore should have known, if he did
not know in fact, that Winer stood to benefit financially in the
other ways enumerated above. See Addington v. Commissioner, 205
F.3d at 59.
Pleas of reliance have also been rejected when neither the
taxpayer nor the adviser knew anything about the nontax business
aspects of the contemplated venture. See id. at 58 (“In general,
it is unreasonable to rely on an adviser who lacks knowledge
about the industry in which the taxpayer is investing.”); Freytag
v. Commissioner, supra; Beck v. Commissioner, 85 T.C. 557 (1985);
see also 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. Insofar as Winer is
concerned, Winer did not have an engineering background, and he
was not an expert in either plastics materials or plastics
recycling. Moreover, Winer never represented that he possessed
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