Allan J. and Brenda Becker - Page 16

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          in 1982.  As a result of his interest in SAB Recycling, on his              
          1982 return petitioner claimed an operating loss in the amount of           
          $3,974 and investment tax and business energy credits in the                
          amount of $8,002.5  Petitioner carried back an additional $262 in           
          business energy credits to 1979.  Except for $20 of the $344 loss           
          from SAB Recovery that petitioner claimed on his 1982 return,               
          respondent disallowed these amounts in full.                                
               Petitioner learned of the Plastics Recycling transactions in           
          the fall of 1981 from Stuart Becker.  Becker had been preparing             
          the tax returns for SBA and petitioner since the early 1960's.              
          He also provided tax advice, tax-oriented financial advice, and             
          representation services before the Internal Revenue Service.                
          Becker characterized his relationship with petitioner during the            
          years at issue as social.  Both men were recently divorced at the           
          time, and they had frequent discussions about personal matters as           
          well as SBA.                                                                
               In the fall of 1981 Becker sent a copy of the SAB Recovery             
          offering memorandum to petitioner and "told him to look at it and           
          call me with any questions."  Petitioner subsequently telephoned            
          Becker and asked him to explain the investment.  Becker gave                
          petitioner a synopsis of the transaction and its tax aspects.  He           

          5    On his 1982 return, petitioner claimed a total loss of                 
          $4,318 ($3,974 from SAB Recycling and $344 from SAB Recovery).              
          Petitioner reported a combined investment tax and business energy           
          credit from SAB Recycling in the amount of $8,264 (separately,              
          each of the credits was in the amount of $4,132).  The business             
          energy credit was subject to a limitation of $3,870.                        




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