William G. and Debra C. Kellen - Page 23




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         investment in San Nicholas.  Yet, petitioner’s experience and his            
         knowledge should have led him to inquire into both the                       
         operational aspects of the partnership and the nature of the                 
         research that U.S. Agri was to conduct under the terms of the R&D            
         contract.19  See Fawson v. Commissioner, T.C. Memo. 2000-195.                
              Although petitioner claims to have visited the jojoba sites             
         about once a month, the primary purpose of these visits was to               
         “see how the plants were growing” and that proper watering and               
         weeding methods were being utilized.  However, there is no                   
         persuasive evidence in the record to demonstrate that petitioner,            
         either as a limited partner in San Nicholas or as the general                
         partner and tax matters partner of four other jojoba                         
         partnerships, visited the jojoba sites in order to determine                 
         whether research or development was being conducted.  If                     
         petitioner had visited the jojoba sites for that purpose, he                 
         would have quickly discovered that U.S. Agri was engaged in                  


               19 We find it curious that petitioner would choose to                  
          emphasize his experience when the record clearly demonstrates               
          that prior to 1982, he did not have any experience in growing               
          jojoba, nor did he have any experience in either the research or            
          development of jojoba.  Petitioner’s experience first came in               
          late 1982, when he became the general partner and tax matters               
          partner of Utah Jojoba, Blythe Jojoba I, Blythe Jojoba II, and              
          Desert Center Jojoba.                                                       
               We find it equally curious that petitioner would choose to             
          emphasize his knowledge when the record demonstrates that prior             
          to 1982, his knowledge was limited to articles that he had read             
          in various magazines and a general familiarity with the existence           
          of an experimental jojoba plantation located at the University of           
          California at Riverside.                                                    





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