- 35 -
Miller reasonable or in good faith. “It is unreasonable for
taxpayers to rely on the advice of someone who they should know
has a conflict of interest.” Addington v. Commissioner, supra at
59. See Vojticek v. Commissioner, supra, to the effect that
advice from such persons “is better classified as sales
promotion”.
4. Feinberg and Lewin
Petitioner also relied upon his partners Feinberg and Lewin.
After Becker retained Feinberg to protect Becker’s interests as
general partner of SAB Foam, Feinberg reviewed the memorandum and
instructed Becker to verify the information in that document.
Feinberg’s knowledge of the transaction was derived from his
review of the memorandum and his discussions with Becker. We
already have established that petitioners may not reasonably rely
on Becker’s advice. Since Feinberg himself lacked the expertise
and knowledge of the pertinent facts to provide informed advice
to petitioner, any advice he gave petitioners about SAB Foam
plainly was of very limited value. See David v. Commissioner, 43
F.3d 788 (2d Cir. 1995). Feinberg was a partner and a coinvestor
rather than an adviser on whom petitioners could rely with
respect to the transaction here.
We also hold that it was not reasonable for petitioners to
rely upon the advice received from Lewin. As an associate for
Miller & Summit, Lewin may have learned about business practices
Page: Previous 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 NextLast modified: May 25, 2011