- 8 -
Corp. v. Commissioner, 60 T.C. 728, 740 (1973); Greene v.
Commissioner, T.C. Memo. 1998-101, affd. without published
opinion 187 F.3d 629 (4th Cir. 1999); Glassley v. Commissioner,
supra; Turner v. Commissioner, T.C. Memo. 1995-363. Whether a
taxpayer is negligent in claiming a tax deduction "depends upon
both the legitimacy of the underlying investment, and due care in
the claiming of the deduction." Sacks v. Commissioner, 82 F.3d
918, 920 (9th Cir. 1996), affg. T.C. Memo. 1994-217; see Greene
v. Commissioner, supra.
A taxpayer may avoid liability for negligence penalties
under some circumstances if the taxpayer reasonably relied on
competent professional advice. See Freytag v. Commissioner, 89
T.C. 849, 888 (1987), affd. 904 F.2d 1011 (5th Cir. 1990), affd.
on other issue 501 U.S. 868 (1991). Such reliance, however, is
"not an absolute defense to negligence, but rather a factor to be
considered." Id. Moreover, the taxpayer must show that the
professional adviser had the expertise and knowledge of the
pertinent facts to provide informed advice on the subject matter.
Id.
The facts pertinent to the instant case, relating to the
structure, formation, and operation of Blythe I are as discussed
in Utah Jojoba I Research v. Commissioner, supra, with the
exception of a few specific dates and dollar amounts. Blythe I
was organized in December 1982 as a limited partnership for the
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