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Commissioner, T.C. Memo. 1995-609; Klieger v. Commissioner, T.C.
Memo. 1992-734.
However, we do not decide this issue solely on petitioners'
failure timely to request waivers, but instead, we have
considered the issue on its merits. Petitioners urge that they
relied on the respective offering materials and their colleagues
at Shea & Gould in deciding on the valuation claimed on their tax
returns. Petitioners contend that such reliance was reasonable
and, therefore, that respondent should have waived the section
6659 additions to tax. However, as we explained above in finding
petitioners liable for the negligence additions to tax,
petitioners' purported reliance on the offering materials and
their colleagues was not reasonable.
Each petitioner read the offering memoranda for the
Partnerships, which contained numerous warnings and caveats,
including the likelihood that the value placed on the recyclers
would be challenged by the IRS as being in excess of fair market
value. Friedman recognized that the purported value of the
Sentinel EPE recycler was intrinsic to the tax benefits, and
Alter undoubtedly learned as much on his own or from one of his
colleagues. Even so, there is no showing in the records in these
cases that petitioners or the persons they purportedly relied
upon--including Ferraro and Carroll--were qualified to assess or
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