Philippe and Nadine Grelsamer - Page 2

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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.........................................9               
          C. Richard Roberts.........................................12               
          D. Stuart Becker and Steven Leicht.........................13               
          E. Petitioners and Their Introduction to the Partnership                    
               Transactions............................................17             
               1.  Philippe and Nadine Grelsamer.......................17             
               2.  David E. Morgan.....................................20             
          OPINION......................................................23             
          A. Section 6653(a)--Negligence.............................26               
               1.  The So-Called Oil Crisis...........................28              
               2.   Petitioners' Purported Reliance on Tax                            
                    Advisers...........................................34             
                    a.  The Circumstances Under Which a Taxpayer May                  
                    Avoid Liability Under Section 6653(a)(1) and                      
                    (2) Because of Reasonable Reliance on                             
                    Competent and Fully Informed Professional                         
                    Advice.........................................35                 
                    b.  Green and the Tax Return Preparers.............37             
                    c.  Becker.........................................38             
                    d.  Conclusion as to Petitioners' Alleged                         
                    Reliance on Becker.............................43                 
               3.  The Private Offering Memoranda.....................46              
               4. Miscellaneous......................................51               
               5. Conclusion as to Negligence........................57               
          B. Section 6659--Valuation Overstatement...................58               
               1. The Grounds for Petitioners' Underpayments.........60               
               2. Concession of the Deficiency.......................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........................................72             
                       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           





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