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petitioners each contested imposition of the section 6659
addition to tax on the grounds that respondent erroneously failed
to waive the addition to tax. Section 6659(e) authorizes
respondent to waive all or part of the addition to tax for
valuation overstatement if taxpayers establish that there was a
reasonable basis for the adjusted bases or valuations claimed on
the returns and that such claims were made in good faith.
Respondent's refusal to waive a section 6659 addition to tax is
reviewable by this Court for abuse of discretion. Krause v.
Commissioner, 99 T.C. at 179.
Petitioners urge that they relied on the offering memoranda
and, in varying degrees, Tomasetti, Frabotta, and Omohundro in
deciding on the valuation claimed on their tax returns.
Petitioners each contend that such reliance was reasonable and,
therefore, respondent should have waived the section 6659
addition to tax. Petitioners cite Krause v. Commissioner, supra;
Mauerman v. Commissioner, 22 F.3d 1001 (10th Cir. 1994), revg.
T.C. Memo. 1993-23; and Rousseau v. United States, 71A AFTR 2d
93-4294, 91-1 USTC par. 50,252 (E.D. La. 1991), in support of
their argument.
We have found that petitioners' purported reliance on
Tomasetti, Frabotta, and Omohundro, in addition to the offering
memoranda, was not reasonable. None of petitioners, their
supposed advisers, nor anyone affiliated with them was educated
or experienced in plastics or plastics recycling. The evaluators
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