- 34 -
undertook significant investigation of the proposed investment
including researching EOR technology. The other taxpayer was a
geological and mining engineer whose work included research of
oil recovery methods and who hired an independent geologic
engineer to review the offering materials. Id. at 166. In the
present cases, petitioners had no education or work experience
with respect to plastics or plastics recycling. There is no
indication in the records that either of petitioners
independently investigated the Sentinel EPE recyclers or hired 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. There is no indication in the records that petitioners
independently investigated the Sentinel EPE recyclers or hired an
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