- 52 -
education (CME) accreditation program for local hospitals. The
underlying tax matter involved the taxpayer's investment in
Diabetics CME Group, Ltd., a limited partnership that invested in
the production, marketing, and distribution of medical
educational video tapes. The District Court found that the
taxpayer's personal expertise and insight in the underlying
investment gave him reason to believe it would be economically
profitable. Although the taxpayer was not experienced in
business or tax matters, he did consult with an accountant and a
tax lawyer regarding those matters. Moreover, the District Court
noted that the propriety of the taxpayer's disallowed deduction
therein was "reasonably debatable." Id. at 93-6447, 93-2 USTC
par. 50,585, at 89,895; see Zfass v. Commissioner, T.C. Memo.
1996-167.
Petitioner and Becker have no formal education, expertise,
or experience in plastics recycling. Tucker never represented
that he was expert in plastics recycling, and petitioner had no
reason to believe otherwise. There is no showing in the record
that petitioner, Tucker, or Becker had any personal insight or
industry know-how in plastics recycling that would reasonably
lead them to believe that the Plastics Recycling transactions
would be economically profitable. Becker purportedly discussed
the transactions with Canno, who apparently was familiar with the
plastics industry, but Canno was not hired by Becker to
investigate PI and the Sentinel EPE recycler, never saw a
Page: Previous 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 NextLast modified: May 25, 2011