Gary W. McDonough - Page 23

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          his participation in that venture.  We hold that petitioner was             
          negligent both in participating in TBS 89-1 and in claiming on              
          his 1991 return that he had a loss attributable to that                     
               Before joining TBS 89-1, petitioner had limited education              
          and practical experience with regard to cattle ranching, and he             
          had no experience with cattle valuation.  Nonetheless, before               
          joining TBS 89-1, petitioner sought no independent professional             
          advice on the legitimacy of TBS 89-1, opting instead to join that           
          venture on the basis of his conversations with his colleagues at            
          work.  Generally, a taxpayer is required to have made a                     
          reasonable inquiry into the validity of a questionable tax                  
          shelter benefit in order not to be liable for an accuracy-related           
          penalty for negligence.  See Collins v. Commissioner, 857 F.2d              
          1383, 1386 (9th Cir. 1988), affg. Dister v. Commissioner, T.C.              
          Memo. 1987-217; Zmuda v. Commissioner, 731 F.2d at 1422; cf.                
          Freytag v. Commissioner, 89 T.C. 849, 888 (1987), affd. 904 F.2d            
          1011 (5th Cir. 1990), affd. 501 U.S. 868 (1991).  Petitioner has            
          failed that requirement.  Accord Hansen v. Commissioner, 471 F.3d           
          at 1029-1030 (in the setting of a “highly suspicious” investment            
          in a Hoyt venture, the taxpayers were negligent in that they did            
          not seek to verify the legitimacy of the tax benefits with a                
          source independent of Hoyt); Van Scoten v. Commissioner, T.C.               
          Memo. 2004-275 (participants in Hoyt ventures were negligent in             

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