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affg. Dister v. Commissioner, T.C. Memo. 1987-217; Sacks v.
Commissioner, T.C. Memo. 1994-217, affd. 82 F.3d 918 (9th Cir.
1996). The total of investment and energy tax credits ostensibly
generated by the partnership and claimed by petitioner was almost
1-1/2 times his cash investment. In addition, petitioner claimed
over $10,000 as a partnership loss. Consequently, like the
taxpayers in Provizer v. Commissioner, T.C. Memo. 1992-177,
“except for a few weeks at the beginning, [petitioner] never had
any money in the * * * [partnership].” The disproportionately
large tax benefits claimed on petitioner’s Federal income tax
return, relative to the dollar amount invested, should have
alerted petitioner to the need for further investigation of the
partnership transactions.
Any reliance petitioner may have placed on the materials in
the offering memorandum was unreasonable in light of the
memorandum’s specific warnings that potential investors should
not rely on the statements or opinions contained in it and that
they should seek independent advice. See Collins v.
Commissioner, supra at 1386. The tax opinion letter prepared by
Boylan & Evans included with the offering memorandum also
expressly cautioned prospective investors such as petitioner not
to rely upon the letter.
Moreover, the tax opinion made clear that no independent
evaluation of the transactions involved in this case was
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