- 51 -
Wood, a group of consolidated cases, all of the taxpayers had
profit objectives, the transactions were not sham transactions,
and one pair of taxpayers inspected the equipment at issue. In
the Davis case, the taxpayers reasonably relied upon a "trusted
and long-term adviser" who was independent of the investment
venture, and the offering materials reviewed by the taxpayers did
not reflect that the principals in the venture lacked experience
in the pertinent line of business.
Unlike the taxpayer in Wright, as a former business reporter
for Time, petitioner plainly had the experience and education
necessary to recognize the importance or meaning of the warning
signs inherent in the Partnership transactions. In contrast to
the Wood case, the Partnership transactions are shams lacking
economic substance; we are not convinced that petitioner had an
honest objective of making an economic profit; and he did not
inspect the recyclers. Unlike the circumstances of the Davis
case, Tucker and Becker were not long-term advisers of
petitioner; Becker was not independent of the SAB Recycling
Partnerships; and the offering memoranda warned that the general
partner had no prior experience in marketing recycling or similar
equipment. Accordingly, petitioners' reliance on the Wright,
Wood, and Davis cases is misplaced.
In Mollen v. United States, supra, the taxpayer was a
medical doctor who specialized in diabetes and who, on behalf of
the Arizona Medical Association, led a continuing medical
Page: Previous 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 NextLast modified: May 25, 2011