- 26 -
with respect to facts that he does not verify. See David v.
Commissioner, 43 F.3d at 789-790; Goldman v. Commissioner, 39
F.3d at 408; Skeen v. Commissioner, 864 F.2d 93 (9th Cir. 1989),
affg. Patin v. Commissioner, 88 T.C. 1086 (1987); Lax v.
Commissioner, T.C. Memo. 1994-329; Sacks v. Commissioner, supra;
Rogers v. Commissioner, supra.
In this case, with the aid of petitioner's testimony and the
stipulated facts, respondent has satisfied the burden of showing
petitioner's negligence in claiming credits and deductions
arising from his investment in the Resource partnership in the
Plastics Recycling transaction.
3. Miscellaneous
Petitioners stipulated that the fair market value of a
Sentinel EPE recycler in 1981 was not in excess of $50,000.
Notwithstanding this concession, petitioners contend that they
were reasonable in claiming credits on their 1981 Federal income
tax return based upon each recycler's having a value of
$1,162,666. In support of this position, petitioners submitted
into evidence preliminary reports prepared for respondent by
Ernest D. Carmagnola (Carmagnola), the president of Professional
Plastic Associates. Carmagnola had been retained by the IRS in
1984 to evaluate the Sentinel EPE and EPS recyclers in light of
what he described as "the fantastic values placed on the * * *
[recyclers] by the owners." Based on limited information
available to him at that time, Carmagnola preliminarily estimated
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