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CONTENTS
Page
MEMORANDUM FINDINGS OF FACT AND OPINION....................... 2
OPINION OF THE SPECIAL TRIAL JUDGE............................ 3
FINDINGS OF FACT.............................................. 6
A. The Plastics Recycling Transactions...................... 6
B. The Partnerships......................................... 8
C. Petitioners and Their Introduction to the Partnership
Transactions.............................................10
1. Mark Friedman.......................................10
2. David and Deborah B. Alter..........................14
OPINION.......................................................21
A. Section 6653(a)--Negligence..............................24
1. The Private Offering Memoranda......................26
2. The So-Called Oil Crisis............................31
3. Petitioners' Purported Reliance on Advisers.........35
4. Miscellaneous.......................................50
5. Conclusion as to Negligence.........................57
B. Section 6659--Valuation Overstatement....................58
1. The Grounds for Petitioners' Underpayments..........59
2. Concession of the Deficiencies......................64
3. Section 6659(e).....................................68
C. Petitioners' Motions For Leave To File Motion For
Decision Ordering Relief From the Negligence Penalty and
the Penalty Rate of Interest and To File Supporting
Memoranda of Law.........................................73
MEMORANDUM FINDINGS OF FACT AND OPINION
DAWSON, Judge: These cases were assigned to Special Trial
Judge Norman H. Wolfe pursuant to the provisions of section
7443A(b)(4) and Rules 180, 181, and 183. They were tried and
briefed separately but consolidated for purposes of opinion. All
section references are to the Internal Revenue Code in effect for
the tax year in issue, unless otherwise indicated. All Rule
references are to the Tax Court Rules of Practice and Procedure.
The Court agrees with and adopts the opinion of the Special Trial
Judge, which is set forth below.
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Last modified: May 25, 2011