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Court found that the taxpayer's personal expertise and insight in
the underlying investment gave him reason to believe it would be
economically profitable. Although the taxpayer was not
experienced in business or tax matters, he did consult with an
accountant and a tax lawyer regarding those matters. Moreover,
the District Court noted that the propriety of the taxpayer's
disallowed deduction therein was "reasonably debatable." See
Zfass v. Commissioner, T.C. Memo. 1996-167.
The records in these cases show that none of petitioners or
their supposed advisers had any formal education, expertise, or
experience in plastics or plastics recycling. None of them had
any personal insight or industry know-how in plastics recycling
that would reasonably lead them to believe that the Partnership
transactions would be economically profitable. The extent of
Tomasetti's, Frabotta's, and Omohundro's "investigation" was a
tour of PI's plant in Hyannis and a discussion with PI personnel
and insiders to the Partnership transactions. No independent
experts in the field of plastics or plastics recycling were
consulted by any of petitioners or their advisers. The facts of
these cases are distinctly different from those in the Mollen
case. Thus, we consider petitioners' arguments with respect to
the Mollen case inapplicable under the circumstances of these
cases.
Petitioner's arguments are not supported by the Ninth
Circuit Court of Appeals' partial reversal of our decision in
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