- 37 -- 37 -
distinctly different from the facts of these cases. In the
Krause case, the taxpayers invested in limited partnerships whose
investment objectives concerned enhanced oil recovery (EOR)
technology. The Krause opinion states that during the late
1970's and early 1980's, the Federal Government adopted specific
programs to aid research and development of EOR technology. Id.
at 135-136. In holding that the taxpayers in the Krause case
were not liable for the negligence additions to tax, this Court
noted that one of the Government's expert witnesses acknowledged
that "investors may have been significantly and reasonably
influenced by the energy price hysteria that existed in the late
1970's and early 1980's to invest in EOR technology." Id. at
177. In the present cases, however, as explained by respondent's
expert Steven Grossman, the price of plastics materials was not
directly proportional to the price of oil, and there is no
persuasive evidence that the so-called oil crisis had a
substantial bearing on petitioners' decisions to invest. While
EOR was, according to our Krause opinion, in the forefront of
national policy and the media during the late 1970's and 1980's,
there is no showing in these records that the so-called energy
crisis would provide a reasonable basis for petitioners'
investing in recycling of polyethylene, particularly in the
machinery here in question.
In addition, the taxpayers in the Krause opinion were
experienced in or investigated the oil industry and EOR
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