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actions in connection with the transactions. See Henry Schwartz
Corp. v. Commissioner, 60 T.C. 728, 740 (1973). When considering
the negligence additions to tax, we evaluate the particular facts
of each case, judging the relative sophistication of the
taxpayers, as well as the manner in which they approached their
investment. See McPike v. Commissioner, T.C. Memo. 1996-46.
1. Petitioners’ Purported Reliance on an Adviser
In these cases, petitioners claim that they reasonably
relied upon the advice of a qualified tax adviser. A taxpayer
may avoid liability for the additions to tax under section
6653(a)(1) and (2) if he or she reasonably relied on competent
professional advice. 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).
See also American Properties, Inc. v. Commissioner, 28 T.C. 1100,
1116-1117 (1957), affd. per curiam 262 F.2d 150 (9th Cir. 1958).
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 the negligence
additions to tax, the taxpayer must show that the professional
had the expertise and knowledge of the pertinent facts to provide
informed advice on the subject matter. See Chakales v.
Commissioner, 79 F.3d 726 (8th Cir. 1996), affg. T.C. Memo. 1994-
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