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Similarly, petitioners in these cases acted on their enthusiasm
for the potential uses of jojoba and acted with knowledge of the
tax benefits of making the investment. The evidence in this
record suggests that the nature of the advice given by Mr. Mathis
was highly generalized and based primarily on a mere cursory
review of the offering rather than on independent knowledge,
research, or analysis. Petitioners failed to show that Mr.
Mathis had the expertise and knowledge of the pertinent facts to
provide informed advice on the investment in Blythe II. See
Freytag v. Commissioner, 89 T.C. at 888. Accordingly,
petitioners failed to establish that their reliance on the advice
of Mr. Mathis was reasonable or in good faith. See Glassley v.
Commissioner, supra.
The Court next examines petitioners' reliance on the advice
of Mr. Sheets. Mr. Sheets had no background or expertise in the
areas of agriculture or jojoba plants. In fact, nearly all of
the previous investments recommended to petitioners by Mr. Sheets
had been real estate investments, and Blythe II was the first
investment of an agricultural nature advocated by him. Also,
because Mr. Sheets was a salesperson for this investment, he had
a personal profit motive, and thus a conflict of interest, in
advising petitioners to purchase the limited partnership
interests. The advice petitioners allegedly received from Mr.
Sheets fails as a defense to negligence due to his lack of
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