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When petitioners invested in the partnerships, they had no
education or experience in plastics materials or plastics
recycling, nor had any of them seen a Sentinel recycler. In each
of these consolidated cases, petitioners contend that they were
reasonable in claiming deductions and credits with respect to the
Partnerships. In support of such contentions, petitioners argue,
in general terms: (1) That claiming the deductions and credits
with respect to the Partnerships was reasonable in light of the
so-called oil crisis in the United States in 1981 and 1982; and
(2) that they reasonably relied upon the offering materials and
qualified advisers, specifically Becker, Green, and their tax
return preparers.
1. The So-Called Oil Crisis
Petitioners maintain that they reasonably expected to make
an economic profit from the Partnership transactions, in
particular because plastic is an oil derivative and the United
States was experiencing a so-called oil crisis during the years
1981 and 1982. In support of this argument, petitioners cite
Krause v. Commissioner, 99 T.C. 132 (1992), affd. sub nom.
Hildebrand v. Commissioner, 28 F.3d 1024 (10th Cir. 1994).
Petitioners' contention that they reasonably expected an
economic profit from the Partnership transactions is
unconvincing, regardless of the so-called oil crisis.
Petitioners made no effort to resolve the caveats and warnings
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