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provides no information about Mr. Jones’ background and
expertise, other than that he helped petitioners prepare their
retirement plan. Although petitioner testified he felt reassured
about any tax risks after talking with Mr. Jones and someone from
CFS, he did not elaborate on what he was told or why he felt
reassured.
Petitioners were not naive investors and should have
recognized the need for independent professional advice. See
LaVerne v. Commissioner, 94 T.C. 637, 652 (1990), affd. without
published opinion 956 F.2d 274 (9th Cir. 1992), affd. in part
without published opinion sub nom. Cowles v. Commissioner, 949
F.2d 401 (10th Cir. 1991); Glassley v. Commissioner, T.C. Memo.
1996-206. Petitioner apparently recognized the necessity of such
advice in connection with the investments of his medical group’s
retirement plan. He and his medical partners hired an attorney
to oversee the retirement plan’s investments. In the case at
hand, however, petitioners relied on the assurances of Mr. Jones
even though petitioner testified he was not clear about the
“legalese” in the offering and that the offering had put him on
notice of tax risks.
Furthermore, petitioners should have had reason to question
Mr. Jones’ representations. Petitioner testified that Mr. Jones
had indicated that he had met with Mr. Kellen, the partnership’s
general partner, and that Mr. Kellen had significant experience
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