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not find petitioners' arguments with respect to the Rousseau case
applicable.
Under the circumstances of these cases, petitioners failed
to exercise due care in claiming large deductions and tax credits
with respect to the Partnerships on their respective Federal
income tax returns. We hold that petitioners did not reasonably
rely upon Tomasetti, Frabotta, or Omohundro and the offering
memoranda, or in good faith investigate the underlying viability,
financial structure, and economics of the Partnership
transactions herein. It is clear from Tomasetti's testimony that
he was concerned with the inflated values placed on the
recyclers, that he communicated his concerns to his clients, and
that all petitioners were made aware of his views with respect to
the Plastics Recycling deal. We hold, upon consideration of the
entire records, that petitioners are liable for the negligence
additions to tax under the provisions of section 6653(a) for 1980
and section 6653(a)(1) and (2) for 1981. Respondent is sustained
on this issue.
Issue 2. Section 6659 Valuation Overstatement
Respondent determined that petitioners were each liable for
the section 6659 addition to tax on the portion of their
respective underpayments attributable to valuation overstatement.
Petitioners have the burden of proving that respondent's
determinations of these section 6659 additions to tax are
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