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relied on PI for the value of the recyclers. An investor as
sophisticated as petitioner either learned or should have learned
the source and shortcomings of Becker’s valuation information
when he reported to them and “precisely” disclosed “what [he] had
done to investigate or analyze the transaction.” Accordingly, we
hold that petitioners did not in good faith or reasonably rely on
Becker as an expert or qualified professional working in the area
of his expertise to establish the fair market value of the
recyclers and the viability or bona fides of the SAB Foam
transactions. Becker never assumed such responsibility, and he
fully described the particulars of his investigation, taking care
not to mischaracterize it as “due diligence”.
In the end, petitioners indirectly and Becker directly
relied upon PI personnel for the value of the recyclers and the
economic viability of the SAB Foam transactions. See Vojticek v.
Commissioner, T.C. Memo. 1995-444, to the effect that advice from
such persons “is better classified as sales promotion.” As
explained above, Becker did not have any education, special
qualifications, or professional skills in plastics materials or
plastics recycling. A taxpayer may rely upon his adviser’s
advice and expertise (in this case accounting and tax advice)
only where such reliance is objectively reasonable, but it is not
reasonable or prudent to rely upon a tax adviser regarding
matters outside his field of expertise or with respect to facts
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