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aspects of the Madison transactions despite the warnings
contained in the POM. Consequently, we conclude that
petitioner’s investigation of the Madison investment was not
reasonable.
b. Petitioner’s Reliance on Advisers
Petitioner also contends that he acted reasonably, in part,
because (1) he heeded the warnings in the POM and delegated his
tax return preparation to his longstanding tax return preparer,
(2) he relied on HG&C to monitor his investment, and (3) he
requested and reviewed the Boylan & Evans limited partner
opinion. Petitioner argues that “Not one of these three
professionals ever advised Petitioner that anything was amiss.
* * * What more could a reasonable and prudent person, not
versed in tax law, do to fulfill his duty to the Commissioner?
Infallibility is not required.” We are not persuaded that
petitioner’s reliance was reasonable.
i. Petitioner’s Tax Return Preparer
The warnings about the potential for an audit and the
promises of large tax benefits contained in the POM should have
caused a prudent investor to question the legitimacy of the
promised tax benefits. Petitioner, however, did not provide his
tax return preparer with a copy of the POM or ask him to
evaluate the Madison investment before petitioner invested in
it. Petitioner nevertheless argues that relying on his return
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