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residual interests) was not reasonable, as that advice, among
other things, had not been furnished by disinterested, objective
advisers but by advisers involved in marketing the first lease
strip deal to CFX. See Rybak v. Commissioner, 91 T.C. 524, 565
(1988); see also Neonatology Associates, P.A. v. Commissioner,
299 F.3d 221, 233-234 (3d Cir. 2002) (holding that the reliance
“must be objectively reasonable”), affg. 115 T.C. 43 (2000).
Indeed, given petitioner’s experience and expertise arranging
lease strip deals and its awareness of Notice 95-53, 1995-2 C.B.
334, petitioner was aware and forewarned but chose to proceed
with the transactions and claim the deductions. See Freytag v.
Commissioner, 89 T.C. 849, 889 (1987), affd. 904 F.2d 1011 (5th
Cir. 1990), affd. 501 U.S. 868 (1991).
We further reject petitioner’s argument that it qualifies
under the reasonable cause and good faith exception of section
6664(c). In that regard, petitioner claimed that it relied upon
and followed the advice of a national accounting firm that
reviewed petitioner’s proposed 1996 return. As previously
discussed, the second lease strip deal had no economic substance
and the $4,056,220 Jenrich note was not a valid indebtedness.
Among other things, it has not been shown that: (1) The
accounting firm’s advice was based upon all pertinent facts and
circumstances and the law as it relates to those facts and
circumstances; (2) petitioner had disclosed all relevant facts to
the accounting firm; and (3) the accounting firm’s advice was
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