- 9 - reasonable and must not be from one with an inherent conflict of interest or from one with no knowledge concerning the matter upon which the advice is given. See id. The advice petitioner allegedly received from Mr. Meinke fails as a defense to negligence due to the clear presence of a conflict of interest. See id.; Rybak v. Commissioner, 91 T.C. 524, 565 (1988). Mr. Meinke was a promoter of the Yuma Mesa partnership and was a principal in the related entities. Thus, any reliance on Mr. Meinke by petitioner was not reasonable. Petitioner asserts that she also received advice concerning the proper tax treatment of the loss from Mr. Mussina. Mr. Mussina was an accountant and attorney who had prepared tax returns for petitioner and advised her concerning legal matters such as the creation of a deferred compensation plan for her professional association. The only evidence in the record supporting petitioner’s assertion that she relied upon Mr. Mussina is petitioner’s testimony that she made an inquiry into the legality of the partnership, to which Mr. Mussina answered that the partnership appeared to be “legal and properly put together.” No testimony was given that she inquired into the proper tax treatment of the partnership loss. No corroborating evidence for the general advice was presented. The alleged advice was sought before petitioner made her investment, and not at the time she filed her return. Petitioner could not recallPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011