Bruce and Lois Zenkel, et al. - Page 18

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          State and local tax refunds, capital gains, and other sources in            
          excess of $300,000.                                                         
               In 1982, Mrs. Zenkel acquired a 9-percent limited                      
          partnership interest in SAB Reclamation for a gross investment of           
          $50,000, without taking into consideration any sales commission             
          rebate or advance royalty distribution.  Based on Mrs. Zenkel's             
          interest in SAB Reclamation, on their 1982 Federal income tax               
          return the Zenkels claimed an operating loss in the amount of               
          $40,100 and investment tax and business energy credits totaling             
          $83,712.  Their total credits claimed, $85,547, were subject to a           
          limitation of $62,841.  The Zenkels carried back the unused                 
          portion of the credits to 1979 and 1980.  Respondent disallowed             
          the Zenkels' claimed operating loss and credits related to Mrs.             
          Zenkel's investment in SAB Reclamation.                                     
               The Zenkels learned of the Plastics Recycling transactions             
          and SAB Reclamation from Robert Steele (Steele), an accountant              
          with Becker Co.  At the time, Becker Co. prepared the Zenkels'              
          Federal and State income tax returns.  Mr. Zenkel had earlier met           
          Steele and Becker on separate occasions during the mid-1970's.              
          Mr. Zenkel initially met Becker in connection with some                     
          investment offerings with which Mr. Zenkel was involved.  After             
          Mrs. Zenkel also met Steele, the couple hired Becker Co. to                 
          handle their tax and related accounting needs.                              
               Steele provided Mrs. Zenkel with a copy of the SAB                     
          Reclamation offering memorandum.  Mrs. Zenkel looked it over and            




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