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We find that petitioners' purported reliance on Maxfield was
not reasonable, not in good faith, nor based upon full
disclosure. Maxfield's expertise was in taxation, not plastics
materials or plastics recycling. He never represented to anyone
at Sann & Howe that he knew anything about plastics recycling or
plastics materials, and petitioners never had reason to believe
otherwise. In addition, Maxfield never purported to be an expert
in tax shelters and stressed that he was not an investment
analyst. Maxfield viewed his role in the matter as nothing more
than "a conveyor of information and of * * *[his] impressions",
and he "made it very clear to each of the potential investors
[that it was] their business decision [to make], not * * *
[his]."
The purported value of the Sentinel EPE recycler generated
the deductions and credits in these cases. That circumstance was
reflected in the offering memoranda, and Maxfield also explained
the tax benefits to petitioners. Accordingly, petitioners
learned or should have learned of the nature of the tax benefits
from the offering materials or Maxfield or both.23 However,
neither Maxfield, petitioners, nor anyone else at Sann & Howe
23 It is not plausible that such experienced and sophisticated
attorneys as petitioners remained ignorant of the nature of the
tax benefits. If such was the case, their ignorance could only
be explained by (1) their failure to read the offering memoranda,
and (2) their failure to listen to Maxfield when he explained the
tax benefits to them.
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