- 2 -
CONTENTS
Page
MEMORANDUM FINDINGS OF FACT AND OPINION........................2
OPINION OF THE SPECIAL TRIAL JUDGE.............................3
FINDINGS OF FACT...............................................7
A. The Plastics Recycling Transactions......................7
B. The Partnerships.........................................9
C. Stuart Becker, Steven Leicht, and Noel Tucker...........12
D. Petitioners and Their Introduction to the Partnership
Transactions............................................18
OPINION.......................................................25
A. Section 6653(a) - Negligence............................28
1. The So-Called Oil Crisis............................30
2. Petitioners' Purported Reliance on Becker...........35
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. Petitioners' Investment Experience,
Sophistication, and Resources...................38
c. Becker's Limited Investigation and Technological
Knowledge and His Emphasis on Disclosure and on
Protection Against Liability....................40
d. Conclusion Concerning Petitioners' Alleged
Reliance on Becker..............................46
3. The Private Offering Memoranda......................48
4. Miscellaneous.......................................53
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
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 183.1 They were tried and
1 All section references are to the Internal Revenue Code in
effect for the years in issue, unless otherwise indicated. All
Rule references are to the Tax Court Rules of Practice and
Procedure.
(continued...)
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011