- 29 -
negligence if reasonable reliance on a competent professional
adviser is shown. See United States v. Boyle, 469 U.S. 241, 250-
251 (1985); Freytag v. Commissioner, 89 T.C. 849, 888 (1987),
affd. 904 F.2d 1011 (5th Cir. 1990), affd. 501 U.S. 868 (1991).
Reliance on professional advice, standing alone, is not an
absolute defense to negligence, but rather a factor to be
considered. See Freytag v. Commissioner, supra. For reliance on
professional advice to excuse a taxpayer from negligence, the
taxpayer must show that the professional had the requisite
expertise, as well as knowledge of the pertinent facts, to
provide informed advice on the subject matter. See David v.
Commissioner, 43 F.3d 788, 789-790 (2d Cir. 1995), affg. T.C.
Memo. 1993-621; Goldman v. Commissioner, supra; Freytag v.
Commissioner, supra.
Petitioner contends that he reasonably relied on the advice
of Gordon. However, Gordon never represented that he had any
specialized knowledge about plastics recycling. Morever, the
record indicates that Gordon received a 10-percent commission in
connection with promoting the Dickinson investment and also
provided legal services for which he was compensated. Reliance
on representations by insiders or promoters has been held to be
an inadequate defense to negligence. See Goldman v.
Commissioner, supra; LaVerne v. Commissioner, 94 T.C. 637, 652-
653 (1990), affd. without published opinion 956 F.2d 274 (9th
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