Richard E. & Elizabeth S. Nilsen - Page 9




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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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