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were not acting unreasonably in claiming a section 174 deduction
for the development of computer software. The court noted the
almost complete absence of case law interpreting section 174 at
the time the taxpayers claimed the deduction and stated that the
taxpayers reasonably could have been led to believe by the
general partner’s experience and involvement with the research
project that they were entitled to the deduction. The court
further stated: “At the time appellants invested, there were
few, if any, warning signs that they would not be entitled to the
deduction.” Id. at 1522-1523. In this case, we have held that
petitioner’s reliance upon Mr. Meinke’s advice was not reasonable
because of the inherent conflict of interest. Furthermore,
petitioner has not established that she received advice
concerning the deduction from anyone independent of the
investment, or that she conducted her own investigation into the
propriety of the deduction. Petitioner may not rely upon a “lack
of warning” as a defense to negligence, where there is no
evidence that a reasonable investigation was ever made which
would have allowed her to discover such a lack of warning.
Petitioner also cites Heasley v. Commissioner, 902 F.2d 380
(5th Cir. 1990), revg. T.C. Memo. 1988-408. The relevancy of
Heasley to petitioner’s situation is unclear. Unlike the
taxpayers in Heasley, petitioner is not a moderate income, blue
collar investor without prior investment experience who relied
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