Alex and Tonja Oria - Page 12

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               Petitioners concede that they underreported their 2000                 
          taxable income in the amount of $248,524 by failing to report the           
          total of the checks Mr. Oria received from Medico in that year.             
          They claim that they did so on the advice of Mr. Loeser.  They do           
          not claim that Mr. Oria was not aware of the total of salary                
          checks that, during 2000, he had signed on behalf of, and                   
          received from, Medico.  They claim that they relied on Mr. Loeser           
          to prepare a correct income tax return for them.  Mr. Oria was              
          aware that Medico was participating in a plan designed by Mr.               
          Loeser under which Medico was paying Mr. Loeser money so that,              
          Mr. Loeser claimed, Mr. Oria could save on taxes.  A reasonably             
          prudent person would not rely on an adviser having an interest in           
          the subject of the advice.  Neonatology Associates, P.A. v.                 
          Commissioner, 115 T.C. 43, 99 (2000), affd. 299 F.3d 221 (3d Cir.           
          2002).  Moreover, Mr. Oria made no attempt to understand the                
          transactions Medico was engaging in to implement Mr. Loeser’s               
          plan.  The detail of those transactions was spelled out in                  
          Medico’s tax returns and the general ledger, yet Mr. Oria was               
          uninterested in Mr. Loeser’s explanation of those documents,                
          regarding their contents as “mumbo jumbo numbers”.  The                     
          assumption underlying the erroneous credits posted to his drawing           
          account was either that he had paid Mr. Loeser or one of his                
          affiliates directly on Medico’s behalf or that he had reimbursed            
          Medico, which had paid Mr. Loeser or one of his affiliates.  Had            
          he paid attention to Mr. Loeser’s explanations, Mr. Oria would              
          have realized that the factual premises relied on by Mr. Loeser             

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