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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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Last modified: May 25, 2011