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were made in good faith. Respondent's refusal to waive a section
6659 addition to tax is reviewable by this Court for abuse of
discretion. Krause v. Commissioner, supra at 179.
Petitioners urged that they relied on Grant, Roberts, and
the offering memorandum in deciding on the valuation claimed on
their tax return. Petitioners contend that such reliance was
reasonable and, therefore, respondent should have waived the
section 6659 addition to tax.
We have found that petitioner's purported reliance on Grant,
Roberts, and the offering memorandum was not reasonable. Grant
and Roberts were promoters of Northeast and knew nothing about
plastics or plastics recycling. See Vojticek v. Commissioner,
T.C. Memo. 1995-444, to the effect that advice from such persons
"is better classified as sales promotion". The evaluators whose
reports were appended to the offering memorandum each owned
interests in partnerships which leased Sentinel EPE recyclers.
The offering memorandum contained numerous caveats, including the
following: NO OFFEREE SHOULD CONSIDER THE CONTENTS OF THIS
MEMORANDUM *** AS *** EXPERT ADVICE. EACH OFFEREE SHOULD CONSULT
HIS OWN PROFESSIONAL ADVISERS. Petitioner did not see a Sentinel
EPE recycler prior to investing in Northeast, nor did he
independently investigate the recyclers.
Petitioners did not have a reasonable basis for the adjusted
bases or valuations reflected on their 1981 return with respect
to their investment in Northeast. Accordingly, in this case
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