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Empire that revealed that as late as August 1982, despite the so-
called oil crisis, only one of its seven recyclers was actually
generating revenue. Nonetheless, petitioners subsequently
invested in Foam, through Jabrilach Recycling, and claim that
they expected to receive an economic profit because of the so-
called oil crisis.
Moreover, petitioners did not adequately explain how the so-
called oil crisis provided a reasonable basis for them to invest
in the Partnerships and claim the associated tax deductions and
credits. The offering materials warned that there could be no
assurances that prices for new resin pellets would remain at
their then-current level. One of respondent's experts, Steven
Grossman, explained that the price of plastics materials is not
directly proportional to the price of oil. In his report, he
stated that less than 10 percent of crude oil is utilized for
making plastics 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). Certainly
Cohn, an admitted "news nut", was aware of such media coverage.
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