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tax returns. Snyder contends that such reliance was reasonable,
and, therefore, respondent should have waived the section 6659
addition to tax. Snyder cites Mauerman v. Commissioner, 22 F.3d
1001 (10th Cir. 1994), revg. T.C. Memo. 1993-23; Krause v.
Commissioner, 99 T.C. 132 (1992); and Rousseau v. United States,
71A AFTR 2d 93-4294, 91-1 USTC par. 50,252 (E.D. La. 1991), in
support of his argument.
We have held that Snyder's purported reliance on the
offering materials, Becker, and Miller was not reasonable.
Becker had no education or experience in plastics or plastics
recycling and fully disclosed the limitations of his
investigation. Miller was an insider to the Plastics Recycling
transaction, and there is no indication in the records that he
had any expertise in plastics materials or plastics recycling.
The evaluators whose reports were appended to each of the
offering memoranda, Ulanoff and Burstein, each owned interests in
partnerships which leased Sentinel EPE recyclers, and Burstein
was also a client of Miller's. The offering memoranda contained
numerous caveats, including the following: NO OFFEREE SHOULD
CONSIDER THE CONTENTS OF THIS MEMORANDUM *** AS *** EXPERT
ADVICE. Snyder did not see a Sentinel EPE recycler prior to
investing in the Partnerships, and he did not independently
investigate the recyclers.
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