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Petitioners analogize their cases to Anderson v.
Commissioner, 62 F.3d 1266, 1271 (10th Cir. 1995), affg. T.C.
Memo. 1993-607. In Anderson, the taxpayer relied on both an
investment adviser and an accountant in making his investment.
The Court of Appeals, although it affirmed the decision of the
Tax Court that the taxpayers were liable for additions to tax for
negligence, found that reliance on the investment adviser, who
received a commission for selling the investment to the taxpayer,
was reasonable under the circumstances of the case. Cf., e.g.,
Carmena v. Commissioner, T.C. Memo. 2001-177 (financial adviser
receiving commissions for sale of investments had inherent
conflict of interest in advice given to investors). However, the
Court of Appeals stressed that the investment adviser--an
independent insurance agent and registered securities dealer--was
a good friend of the taxpayer and was not affiliated with the
investment the taxpayers entered into. Anderson v. Commissioner,
supra at 1271.
The present cases are distinguishable from Anderson in two
important respects. First, in the cases at hand, Mr. Trimboli
was involved with principals of the investment prior to the
creation of the partnership. In particular, he was in contact
with Mr. Cole, who was to become the general partner of Arid
Land, and with Mr. Pace, who was to become the president of the
research and development contractor. Although petitioners argue
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