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for petitioners' investing in recycling of polyethylene,
particularly in the machinery here in question.
In addition, the taxpayers in the Krause case were
experienced in or investigated the oil industry and EOR
technology specifically. One of the taxpayers in the Krause case
undertook significant investigation of the proposed investment
including researching EOR technology. The other taxpayer was a
geological and mining engineer whose work included research of
oil recovery methods and who hired an independent geologic
engineer to review the offering materials. Id. at 166. In the
present cases, petitioners were not experienced or educated in
plastics recycling, and they did not independently investigate
the Sentinel EPE recyclers or hire an expert in plastics to
evaluate the Partnership transactions. Although Sann spoke to
client contacts in the oil business, he recognized that their
opinions about the future price of oil were nothing more than
speculation. We consider petitioners' arguments with respect to
the Krause case inapplicable.
3. Petitioners' Purported Reliance on an Adviser
Petitioners claim that they reasonably relied upon the
advice of a qualified adviser, Maxfield.
The concept of negligence and the argument of reliance on an
expert are highly fact intensive. Petitioners in these cases are
very well educated and sophisticated attorneys. Sann specializes
in international law and has advised foreign individuals and
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