Jeffrey I. and Roberta H. Stone - Page 23

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               The offering materials clearly stated that there was no                
          established market for leasing or operating the recyclers.                  
          Information published prior to the Plastics Recycling                       
          transactions indicated that several machines capable of                     
          densifying low density materials already were on the market.                
          Other plastics recycling machines available during 1981 ranged in           
          price from $20,000 to $200,000, including the Foremost                      
          Densilator, Nelmor/Weiss Densification System (Regenolux), Buss-            
          Condux Plastcompactor, and Cumberland Granulator.  See Provizer             
          v. Commissioner, T.C. Memo. 1992-177.                                       
               Petitioners have failed to show that Tomasetti, Frabotta,              
          Omohundro, or Finkle & Co. was qualified to evaluate the Sentinel           
          EPE recyclers and the Partnership transactions.  Tomasetti was              
          skeptical of the recycler's inflated value, and he communicated             
          the results of his investigation and review to his clients.                 
          Frabotta's and Tomasetti's testimony that they believed the                 
          purported value of the recycler was supported by the economic               
          projections in the offering materials is without merit and not              
          credible.  Petitioners knew that Tomasetti and Frabotta had no              
          education or expertise in plastics or plastics recycling, and               
          there is no reason to doubt that Tomasetti's reservations and               
          disclaimers were communicated to petitioners.  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 to rely upon an adviser regarding matters outside of his            

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