- 54 -
reliance is especially unreasonable when the advice would seem to
a reasonable person to be “too good to be true”. See e.g.,
Pasternak v. Commissioner, 990 F.2d at 903; Elliott v.
Commissioner, 90 T.C. 960 (1998); Gale v. Commissioner, T.C.
Memo. 2002-54. A reasonable person would find Henkell’s advice
to be too good to be true. At a minimum, such advice would cause
a reasonable person to seek independent counsel.
At trial, petitioner sought to defend the trusts as
established for asset protection purposes rather than tax
avoidance. However, petitioner’s testimony concerning the asset
protection benefits of the trusts was ill-conceived and legally
erroneous.9 Even at the time of trial he had not thought through
the asset protection benefits of using the trusts.
We did not find petitioner’s alleged asset protection
motivations to be credible. Petitioner’s argumentative demeanor
while testifying at trial evidenced an intent to justify the
creation of the trusts by diverting the Court’s attention from
his tax avoidance motives.
Petitioner redeemed himself to some extent, however, by
conceding the issue before the parties’ briefs were due.
Petitioner’s late concession is better than none at all. We will
9For example, petitioner testified to his alleged
understanding that he would avoid personal liability for causing
an automobile accident if the vehicle he was driving had been
transferred into a trust.
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