Robert D. and Patricia K. Kaliban, et al. - Page 31

                                               - 31 -                                                 
            materials and that studies have shown that "a 300% increase in                            
            crude oil prices results in only a 30 to 40% increase in the cost                         
            of plastics products."  Furthermore, during 1980 and 1981, in                             
            addition to the media coverage of the so-called oil crisis, there                         
            was "extensive continuing press coverage of questionable tax                              
            shelter plans."  Zmuda v. Commissioner, 731 F.2d 1417, 1422 (9th                          
            Cir. 1984), affg. 79 T.C. 714 (1982).                                                     
                  Petitioners' reliance on Krause v. Commissioner, 99 T.C. 132                        
            (1992), affd. sub nom. Hildebrand v. Commissioner, 28 F.3d 1024                           
            (10th Cir. 1994), is misplaced.  The facts in the Krause case are                         
            distinctly different from the facts of these cases.  In the                               
            Krause case, the taxpayers invested in limited partnerships whose                         
            investment objectives concerned enhanced oil recovery (EOR)                               
            technology.  The Krause opinion states that during the late                               
            1970's and early 1980's, the Federal Government adopted specific                          
            programs to aid research and development of EOR technology.  Id.                          
            at 135-136.  In holding that the taxpayers in the Krause case                             
            were not liable for the negligence additions to tax, this Court                           
            noted that one of the Government's expert witnesses acknowledged                          
            that "investors may have been significantly and reasonably                                
            influenced by the energy price hysteria that existed in the late                          
            1970s and early 1980s to invest in EOR technology."  Id. at 177.                          
            In the present cases, however, as explained by respondent's                               
            expert Steven Grossman, the price of plastics materials was not                           
            directly proportional to the price of oil, and there is no                                

Page:  Previous  21  22  23  24  25  26  27  28  29  30  31  32  33  34  35  36  37  38  39  40  Next

Last modified: May 25, 2011