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invest, also.
Petitioners rely on Dyckman v. Commissioner, T.C. Memo.
1999-79, for the proposition that reliance on a trusted friend or
adviser (such as Krickstein) relieves a taxpayer from liability
for negligence. That case, however, is distinguishable from the
present ones.
In Dyckman, we held for the taxpayers on the issue of
negligence based on special and unusual circumstances, including
the taxpayers’ complete lack of sophistication in investment
matters and the long-term special relationship of trust and
friendship that existed between the taxpayers’ and their C.P.A.
Also determinative was the fact that the taxpayers did not invest
in order to obtain tax benefits; rather, their sole motivation
was to provide for their retirement, and they were not even aware
that their investment was in a partnership designed to produce
tax benefits. Further, the taxpayers were not provided with any
literature, such as an offering letter or prospectus, regarding
their investment.
In contrast, petitioner is a sophisticated investor and he
possessed considerable investment experience at the time that he
invested in Dickinson. Moreover, petitioner was aware that his
investment in Dickinson offered immediate tax benefits in excess
of his investment. Indeed, petitioner was not only influenced to
invest in Dickinson in order to obtain the promised tax benefits,
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