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recycler. Brodie undertook no research or investigation beyond
speaking with Greene and "reviewing" the offering memorandum.
Although Greene believed his commission was disclosed to Brodie
by notice or letter, Brodie could not recall compensating Greene
for, as he put it, the "service of submitting a prospectus for me
to read and telling me that it was a good investment for me."
Greene considered the Plastics Recycling deal a tax shelter with
tax benefits for investors approximately four times the
investment. He obtained his information from Bachmann, and there
is no reason to think he did not pass on this same information to
his client, Brodie.
It was petitioners' reliance upon the purported value of the
Sentinel EPE recycler that generated the deductions and credits
in these cases. Yet the purported value of the Sentinel EPE
recyclers is the very thing that petitioners, and the accountants
Bachmann, Schwartz, did not verify. A taxpayer may rely upon his
adviser's expertise (in these cases accounting, financial
planning, and tax advice), but it is not reasonable or prudent
for petitioners to rely upon an adviser regarding matters outside
of his field of expertise or with respect to facts which he does
not verify. See Skeen v. Commissioner, 864 F.2d 93 (9th Cir.
1989), affg. Patin v. Commissioner, 88 T.C. 1086 (1987); Lax v.
Commissioner, T.C. Memo. 1994-329, affd. without published
opinion 72 F.3d 123 (3d Cir. 1995).
Moreover, a careful consideration of the materials in the
respective offering memoranda, especially the discussions in the
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