- 28 -
K-1 that petitioner had received from San Nicholas.20
Finally, petitioners rely heavily on Krause v. Commissioner,
99 T.C. 132 (1992), affd. sub nom. Hildebrand v. Commissioner, 28
F.3d 1024 (10th Cir. 1994). That case, however, is distinguishable
on its facts.
In Krause v. Commissioner, supra, we held for the taxpayers
on the issue of negligence. We did so in the context of oil
recovery technology based on special or unusual circumstances
related to the energy and oil crisis of the late 1970s and early
1980s:
In evaluating the imposition of the additions to
tax in this case, and in light of the above facts
(encouraging investments in and the development of
tertiary oil recovery methods such as * * * [enhanced
oil recovery] technology), we are somewhat understanding
of the individual investments that were made in * * *
Partnerships. In the context of the hysteria relating
to the energy crisis, the oil price increases of the
late 1970s, the industry and the governmental interest
in * * * [enhanced oil recovery] technology, the heavy
and sophisticated promotion of these investments * * *
we conclude that petitioners are not liable for the
additions to tax and the
20 Although petitioner testified that he provided Mr.
Maryanov with a copy of the offering memorandum, there is nothing
in the record to indicate whether Mr. Maryanov either read or
considered it before he prepared petitioners’ 1983 tax return.
In addition, even though, as petitioner testified, Mr. Maryanov
may have been “involved with some jojoba growers in the Palm
Springs area”, there is nothing in the record to indicate that
Mr. Maryanov was knowledgeable about the nontax aspects of the
San Nicholas promotion. See Barlow v. Commissioner, T.C. Memo.
2000-339 (“A taxpayer may not reasonably rely on the advice of an
accountant who knows nothing about the nontax business aspects of
the contemplated venture.”).
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