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specialized knowledge of the plastics recycling industry, and he
had, at most, only limited experience in marketing recycling or
similar equipment. Indeed, Winer’s limited experience (at best)
in marketing recycling or similar equipment was one of the
business risks that the offering memorandum specifically
identified.
In sum, we do not think that petitioner’s professed reliance
on Winer’s advice was reasonable.
B. Petitioner’s Reliance on His Brother
Petitioner also contends that he relied on his brother’s
advice in deciding to invest in Whitman and that such reliance
was reasonable. Although the record demonstrates that petitioner
relied on his brother, we do not think that such reliance was
reasonable.
As previously stated, pleas of reliance have been rejected
when neither the taxpayer nor the adviser knew anything about the
nontax business aspects of the contemplated venture. E.g.,
Addington v. Commissioner, supra; Freytag v. Commissioner, supra;
Beck v. Commissioner, supra; see also Patin v. Commissioner,
supra; Kleiger v. Commissioner, supra. In the present cases,
petitioner’s brother had no specialized knowledge of the plastics
recycling industry and had no expertise in appraising either the
value of property in general or plastics recycling machines in
particular. In fact, the record suggests that petitioner knew
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