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In Mollen, the taxpayer was a medical doctor who specialized
in diabetes and who, on behalf of the Arizona Medical
Association, led a continuing medical education (CME)
accreditation program for local hospitals. The underlying tax
matter involved the taxpayer's investment in Diabetics CME Group,
Ltd., a limited partnership that invested in the production,
marketing, and distribution of medical educational video tapes.
The District 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." Id.
Neither petitioners nor Becker had any formal education,
expertise, or experience in plastics materials 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 Plastics Recycling transactions would be
economically profitable. Becker and petitioners relied upon
representations by insiders to the Plastics Recycling
transactions, and neither he nor petitioners hired any
independent experts in the field of plastic materials or plastics
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