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partnerships, the discrepancies in the partnerships in which
petitioner was involved, and the continuous warnings being sent
by respondent--was unreasonable under the circumstances.
In summary, petitioner asserts that his investigation
yielded no indication of wrongdoing by Mr. Hoyt, and that an
“average” taxpayer would have been unable to uncover Mr. Hoyt’s
fraud. However, we conclude that petitioner was nevertheless
negligent in not adequately investigating the partnership and/or
seeking qualified independent advice concerning it.
B. Deception and Fraud by Mr. Hoyt
Petitioner next argues that he should not be liable for the
negligence penalty because he was defrauded and otherwise
deceived by Mr. Hoyt with respect to his investment in the Hoyt
partnerships. In this regard, petitioner first argues that the
doctrine of judicial estoppel bars application of the negligence
penalty because the U.S. Government successfully prosecuted Mr.
Hoyt for, in general terms, defrauding petitioner.
Judicial estoppel is a doctrine that prevents parties in
subsequent judicial proceedings from asserting positions
contradictory to those they previously have affirmatively
persuaded a court to accept. United States ex rel. Am. Bank v.
C.I.T. Constr., Inc., 944 F.2d 253, 258-259 (5th Cir. 1991);
Edwards v. Aetna Life Ins. Co., 690 F.2d 595, 598-599 (6th Cir.
1982). Both this Court and the Court of Appeals for the Sixth
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