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in the Krause case undertook significant investigation of the
proposed investment including researching EOR technology. The
other taxpayer, a geological and mining engineer whose work
included research of oil recovery methods, hired an independent
geologic engineer to review the offering materials. Id. at 166.
Like the latter taxpayer, petitioners are engineers experienced
in the oil industry. Unlike the taxpayers in the Krause case,
however, petitioners did not research the plastics recycling
industry, independently investigate the Sentinel recyclers, or
hire an expert in plastics to evaluate the Partnership
transactions.
In Rousseau v. United States, supra, the property underlying
the investment, ethanol producing equipment, was widely
considered at that time to be a viable fuel alternative to oil,
and its potential for profit was apparent. In addition, the
taxpayer therein conducted an independent investigation of the
investment and researched the market for the sale of ethanol in
the United States. In contrast, as we noted in distinguishing
the Krause case, there is no showing in these records that the
so-called oil crisis would provide a reasonable basis for
petitioners' investing in the polyethylene recyclers here in
question. As noted above, petitioners did not independently
investigate the Sentinel EPE recyclers or hire an expert in
plastics to evaluate the Partnership transactions. The facts of
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