- 16 -
Meyers to explain the Blythe II investment to them, which would
seem particularly important given the fact that petitioners opted
to not read the offering.
The facts in this case are similar to those in Glassley v.
Commissioner, T.C. Memo. 1996-206, in which this Court found that
the taxpayers:
acted on their fascination with the idea of
participating in a jojoba farming venture and their
satisfaction with tax benefits of expensing their
investments, which were clear to them from the
promoter’s presentation. They passed the offering
circular by their accountants for a "glance" * * *
Similarly, petitioners acted on their enthusiasm for the
potential uses of jojoba and acted with knowledge of the tax
benefits of making the investment. What little evidence this
record contains about the nature of the advice given by Mr.
Meyers suggests that such advice 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. Meyers 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. Meyers was reasonable or in good faith. See
Glassley v. Commissioner, supra.
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NextLast modified: May 25, 2011