- 55 -
but their discussion was limited to Lauren's impression of PI.
Lauren did not read the Poly Reclamation offering memorandum, see
a Sentinel EPE recycler, or do any type of investigation into the
plastics recycling market. Petitioners and their colleagues did
not hire any independent experts in the field of plastic
materials or plastics recycling. They relied upon
representations by insiders to the Plastics Recycling
transactions. Accordingly, we consider petitioners' arguments
with respect to the Mollen case inapplicable under the
circumstances of these cases.
Petitioners' reliance on the Durrett and Chamberlain cases
is also misplaced. In those cases, the Court of Appeals for the
Fifth Circuit reversed this Court's imposition of the negligence
additions to tax in two nonplastics recycling cases. The
taxpayers in the Durrett and Chamberlain cases were among
thousands who invested in the First Western tax shelter program
involving alleged straddle transactions of forward contracts. In
the Durrett and Chamberlain cases, the Court of Appeals for the
Fifth Circuit concluded that the taxpayers reasonably relied upon
professional advice concerning tax matters. In other First
14(...continued)
records fail to establish that they were qualified to analyze the
Sentinel EPE recycler or the Plastics Recycling transactions.
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