- 14 -
under section 174. It is also notable that Mr. Hulse had no
educational background or experience in the area of agricultural
pursuits.
There is no evidence in the record to suggest that
petitioners ever questioned Mr. Hulse about the facts and/or
legal analysis upon which he based his recommendations. Further,
the record is devoid of any evidence that petitioners asked Mr.
Hulse to explain the Blythe II investment to them, which would
seem particularly important given the fact that petitioners
clearly did not carefully scrutinize the offering themselves.
The facts in this case are similar to those in Glassley v.
Commissioner, T.C. Memo. 1996-206, in which this Court found that
the taxpayers:
acted on their fascination with the idea of
participating in a jojoba farming venture and their
satisfaction with tax benefits of expensing their
investments, which were clear to them from the
promoter’s presentation. They passed the offering
circular by their accountants for a "glance" * * *.
Similarly, petitioners in this case acted on their enthusiasm for
the potential uses of jojoba and acted with knowledge of the tax
benefits of making the investment. The evidence in this record
suggests that the nature of the advice given by Mr. Hulse was
highly generalized and based primarily on a mere cursory review
of the offering rather than on independent knowledge, research,
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011