- 47 -
The purported value of the Sentinel EPE recycler generated
the deductions and credits in these cases, and that circumstance
was clearly reflected in the offering memoranda. Certainly
Becker recognized the nature of the tax benefits and, given their
education and investment experience, petitioners should have
recognized it as well. Yet neither petitioners nor Becker
verified the purported value of the Sentinel EPE recycler.
Becker confirmed at trial that he relied on PI for the value of
the Sentinel EPE recyclers. Investors as sophisticated as
petitioners either learned or should have learned the source and
shortcomings of Becker's valuation information when he reported
to them and "precisely" disclosed "what [he] had done to
investigate or analyze the transaction." Accordingly, we hold
that petitioners did not in good faith or reasonably rely on
Becker as an expert or a qualified professional working in the
area of his expertise to establish the fair market value of the
Sentinel EPE recycler and the viability or bona fides of the
Partnership transactions. Becker never assumed such
responsibility, and he fully described the particulars of his
investigation, taking care not to mischaracterize it as "due
diligence."
Page: Previous 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 NextLast modified: May 25, 2011