Leon and Belle Atkind - Page 9

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            shareholder in F & G.  Grant and Roberts have been general                                  
            partners together in other investments.  The Hyannis offering                               
            memorandum disclosed that Roberts and Grant could each be deemed                            
            promoters of Hyannis and that Miller represented Grant.  Roberts                            
            mailed petitioner a copy of the Hyannis offering memorandum.                                
            Petitioner reviewed the offering memorandum and directed his                                
            questions to Roberts.  Based on the information provided by these                           
            sources, and his personal judgment, petitioner invested in                                  
                  Petitioners do not have any education or work experience in                           
            plastics recycling or plastics materials.  Petitioner did not                               
            investigate PI.  Petitioners did not see a Sentinel recycler                                
            before investing in Hyannis.                                                                
                  In Provizer v. Commissioner, T.C. Memo. 1992-177, a test                              
            case involving the Clearwater transaction and another tier                                  
            partnership, this Court (1) found that each Sentinel EPE recycler                           
            had a fair market value not in excess of $50,000, (2) held that                             
            the Clearwater transaction was a sham because it lacked economic                            
            substance and a business purpose, (3) upheld the section 6659                               
            addition to tax for valuation overstatement since the                                       
            underpayment of taxes was directly related to the overstatement                             
            of the value of the Sentinel EPE recyclers, and (4) held that                               
            losses and credits claimed with respect to Clearwater were                                  
            attributable to tax-motivated transactions within the meaning of                            
            section 6621(c).  In reaching the conclusion that the Clearwater                            

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