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Ewing v. Commissioner, 91 T.C. 396, 423 (1988), affd. without
published opinion 940 F.2d 1534 (9th Cir. 1991). Whether a
taxpayer relies on advice and whether such reliance is reasonable
hinge on the facts and circumstances of the case and the law that
applies to those facts and circumstances. See sec. 1.6664-
4(c)(i), Income Tax Regs. A professional may render advice that
may be relied upon reasonably when he or she arrives at that
advice independently, taking into account, among other things,
the taxpayer’s purposes for entering into the underlying
transaction. See sec. 1.6664-4(c)(i), Income Tax Regs.; see also
Leonhart v. Commissioner, 414 F.2d 749 (4th Cir. 1969), affg.
T.C. Memo. 1968-98. Reliance may be unreasonable when it is
placed upon insiders, promoters, or their offering materials, or
when the person relied upon has an inherent conflict of interest
that the taxpayer knew or should have known about. See Goldman
v. Commissioner, 39 F.3d 402 (2d Cir. 1994), affg. T.C. Memo.
1993-480; LaVerne v. Commissioner, 94 T.C. 637, 652-653 (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); Marine v.
Commissioner, 92 T.C. 958, 992-93 (1989), affd. without published
opinion 921 F.2d 280 (9th Cir. 1991). Reliance also is
unreasonable when the taxpayer knew, or should have known, that
the adviser lacked the requisite expertise to opine on the tax
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