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decisions to invest. EOR was in the forefront of national policy
and the media during the late 1970's and 1980's, and ethanol was
widely considered to be a viable fuel alternative to oil. In
contrast, there is no showing in the record of this case that the
so-called energy crisis would provide a reasonable basis for
petitioners' investing in recycling of polyethylene, particularly
in the machinery here in question. Accordingly, we do not
consider petitioners' arguments with respect to the Krause and
Rousseau cases applicable.
Petitioners also cite a number of cases in which courts
rejected the negligence additions to tax because the taxpayers
reasonably relied upon offering materials and/or qualified expert
advice. Mollen v. United States, 72 AFTR 2d 93-6443, 93-2 USTC
par. 50,585 (D. Ariz. 1993); Brifman v. Commissioner, T.C. Memo.
1992-375; Gralnek v. Commissioner, T.C. Memo. 1989-433; Butler v.
Commissioner, T.C. Memo. 1985-613. However, we are not convinced
that petitioner placed a great deal of reliance on the offering
materials. The record shows that petitioner did not give due
consideration to many of the caveats and warnings contained in
the offering memorandum, particularly the business risk factors
and PI's express disregard for patent protection. With respect
to expert advice, petitioner's own testimony is the only account
in the record regarding any discussions he had with others, and
he did not adequately relate the substance of any advice he may
have received. The record does not convince us that petitioner
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