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relied on him and his advice, 1995. Robert Henkell before his
IRS downfall, was a leader in the Trust business”.
It is well established that taxpayers generally cannot
“reasonably rely” on the professional advice of a tax shelter
promoter. See Goldman v. Commissioner, 39 F.3d 402, 408 (2d Cir.
1994) (“Appellants cannot reasonably rely for professional advice
on someone they know to be burdened with an inherent conflict of
interest.”), affg. T.C. Memo. 1993-480; Neonatology Associates,
P.A. v. Commissioner, 115 T.C. 43, 98 (2000) (“Reliance may be
unreasonable when it is placed upon insiders, promoters, or their
offering materials, or when the person relied upon has an
inherent conflict of interest that the taxpayer knew or should
have known about.”); Marine v. Commissioner, 92 T.C. 958, 992-993
(1989), affd. without published opinion 921 F.2d 280 (9th Cir.
1991). Such reliance is especially unreasonable when the advice
would seem to a reasonable person to be “too good to be true”.
Pasternak v. Commissioner, 990 F.2d 893, 903 (6th Cir. 1993),
affg. Donahue v. Commissioner, T.C. Memo. 1991-181; Elliott v.
Commissioner, 90 T.C. 960, 974 (1988), affd. without published
opinion 899 F.2d 18 (9th Cir. 1990); Gale v. Commissioner, T.C.
Memo. 2002-54.
This is another case of “too good to be true”. Petitioner
could not reasonably have believed that he could transfer fully
depreciated property to the trusts without recognizing gain and
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