- 24 - $17,637 and an investment tax and business energy credit totaling $35,094.10 Respondent disallowed Addington's claimed operating losses and credits related to Empire, Plymouth, and Foam in full, except for the operating losses from Empire and Plymouth claimed on his 1982 return. In addition, with respect to Empire, respondent determined that Addington had a distributive share of income in the amount of $2,500 for 1981. Addington learned of the Plastics Recycling transactions and the Partnerships from Maxfield at a firm meeting. At the meeting, Maxfield briefly described the transactions and made an offering memorandum available for review. Addington spent approximately 1 hour perusing it. He did not check the figures in the cash-flow analysis section of the offering memorandum. Although he was aware of the tax benefits, Addington claims that he had no idea how they were derived. At trial, Addington could not recall ever having met Roberts. He could not recall reading that the tax benefits were generated by the purported value of the machine, nor could he recall reading about any potential conflicts of interest. After reviewing the offering memorandum, Addington spoke to Maxfield. He understood that Maxfield's investigation had entailed speaking to Roberts and Taggart, and he also was aware 10 Addington claimed an investment credit totaling $35,498 on his 1982 return. Of that amount, $35,094 derived from Foam. The investment tax credit and business energy credit generated by Foam each were in the amount of $19,192. However, his business energy credit was subject to limitation of $15,902.Page: Previous 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Next
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