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"not an absolute defense to negligence, but rather a factor to be
considered." Id. For reliance on professional advice to relieve
a taxpayer from the negligence addition to tax, 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. See id.
The facts pertinent to the instant cases, relating to the
structure, formation, and operation of Blythe II, are as
discussed in Utah Jojoba I Research v. Commissioner, T.C. Memo.
1998-6, with the exception of a few specific dates and dollar
amounts. Blythe II was organized in December 1982, as a limited
partnership for the described purpose of conducting research and
development (R & D) involving the jojoba plant. The offering,
dated November 30, 1982, provided for a maximum capitalization of
$2,968,000 consisting of 350 limited partnership units at $8,480
per unit. Each unit required a cash downpayment of $2,500 and a
noninterest-bearing promissory note in the principal amount of
$5,980 payable in 10 annual installments with an acceleration
provision in the event of default. The offering was limited to
investors with a net worth (exclusive of home, furnishings, and
automobiles) of $150,000, or investors whose net worth was
$50,000 (exclusive of home, furnishings, and automobiles) and who
anticipated that, for the taxable year of the investment they
would have gross income equal to $65,000, or taxable income, a
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