James D. Barber and Betty L. Barber - Page 45




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          benefits might expose his investment to be the tax shelter it               
          clearly was.  In this regard, we are convinced that petitioner              
          consulted Thompson in order to provide “cover” and                          
          “plausibility”; likewise, we are convinced that petitioner was              
          determined to “interpret” whatever advice that he received as               
          justification for the tax benefits that he had purchased.                   
               In sum, we do not think that petitioner’s professed reliance           
          on Thompson was reasonable.  See, e.g., Addington v.                        
          Commissioner, 205 F.3d 54 (2d Cir. 2000), affg. Sann v.                     
          Commissioner, T.C. Memo. 1997-259.                                          
               D.  Other Matters                                                      
               Petitioners contend that investors such as themselves should           
          not be burdened with the obligation of performing independent               
          investigations of the ventures in which they invest.  In                    
          petitioners’ view, such a requirement would impose an economic              
          burden and prevent taxpayers such as themselves from investing.             
          As applicable to the present cases, however, this argument is               
          flawed in that it virtually presumes, among other things that:              
          Petitioner should not have been expected to carefully read the              
          offering memorandum; petitioner should not have been expected to            
          consider the numerous caveats and warnings regarding the business           
          and tax risks inherent in the Whitman investment; petitioner was            
          not principally motivated by the prospect of receiving immediate            
          tax benefits in excess of his investment; and petitioner was                






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