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to that of insider or promoter, which advice is inherently
suspect. E.g., Addington v. Commissioner, 203 F.3d at 59;
Pasternak v. Commissioner, 99 F.2d at 903.
In Glassley v. Commissioner, T.C. Memo. 1996-206, we found
that the taxpayers:
acted on their fascination with the idea of
participating in a jojoba farming venture and their
satisfaction with tax benefits of expensing their
investments, which were clear to them from the
promoter’s presentation. They passed the offering
circular by their accountants for a “glance” * * *.
The record in the present case suggests that whatever advice may
have been given by Mr. Jacobs was nothing more than a generalized
affirmation to invest in jojoba. Indeed, at trial, petitioner
testified that Mr. Jacobs “thought * * * the investment was very
good”.
Petitioner also contends that he reasonably relied on advice
from a professor at the University of California at Riverside, a
Dr. Yermanos, an individual whom petitioner regards as an expert
in jojoba.26 Yet petitioner admits that he met this individual
only once and that he showed him no documentation whatsoever.
Indeed, there is nothing in the record to suggest that petitioner
ever discussed the details of San Nicholas with Dr. Yermanos or
that Dr. Yermanos even knew about the existence of the
26 We note that this individual did not testify at trial, so
we know essentially nothing about him. We also note that no
mention is made of a “Dr. Yermanos” in Utah Jojoba I Research v.
Commissioner, T.C. Memo. 1998-6.
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