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partnerships entered into transactions similar to the Partnership
transactions, also involving Sentinel EPE recyclers and Sentinel
expanded polystyrene (EPS) recyclers. We refer to these
collectively as the Plastics Recycling transactions.
B. The Partnerships
SAB Recovery and SAB Recycling were organized and promoted
by petitioner's brother Stuart Becker (Becker), a certified
public accountant and the founder and principal owner of Stuart
Becker & Co., P.C. (Becker Co.), an accounting firm that
specialized in tax matters. SAB Recovery was formed in late 1981
and SAB Recycling was formed in early 1982. Becker organized a
total of six recycling partnerships (the SAB Recycling
Partnerships). Two of the SAB Recycling Partnerships closed in
late 1981, two closed in early 1982, and two more closed in late
1982.
The general partner of each of the SAB Recycling
Partnerships, including SAB Recovery and SAB Recycling, is SAB
Management Ltd. (SAB Management). SAB Management is wholly owned
by Scanbo Management Ltd. (Scanbo), which is wholly owned by
Becker. Scanbo is an acronym for the names of three of Becker's
children: Scott, Andy, and Bonnie. SAB Management did not
engage in any business before becoming involved with the SAB
Recycling Partnerships.
With respect to each of the SAB Recycling Partnerships, a
private placement memorandum was distributed to potential limited
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