- 81 -- 81 -
liable for the negligence additions to tax, petitioners'
purported reliance on the offering materials and their advisers
was not reasonable.
The offering materials for the Partnerships 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. At trial, Fishbach was
unsure if he had read the offering memoranda and speculated that
he spent just a short amount of time perusing them and that he
flipped through the risk factors. Neither Fishbach nor Gollin
sought to resolve the numerous issues raised in the offering
memoranda.
Becker possessed no special qualifications or professional
skills in the recycling or plastics industries and petitioners
had no reason to believe otherwise. Although Fishbach claims
that he did not know whether Hertan had any education or
experience in plastics recycling, nothing in Hertan's background
would indicate such qualifications, and Fishbach conceded that
Hertan never said he had such education or experience. Despite
these obvious limitations, Becker, Hertan, and petitioners never
hired or consulted any plastics engineering or technical experts
with respect to the Plastics Recycling transactions. Becker
18(...continued)
reports prepared by Carmagnola to be unreliable and of no
consequence.
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