David and Shirley Singer - Page 26

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          upon by the taxpayer knew anything about the nontax business                
          aspects of the contemplated venture.  David v. Commissioner,                
          supra; Goldman v. Commissioner, supra; Freytag v. Commissioner,             
          supra; Beck v. Commissioner, 85 T.C. 557 (1985); Buck v.                    
          Commissioner, supra; Lax v. Commissioner, T.C. Memo. 1994-329,              
          affd. without published opinion 72 F.3d 123 (3d Cir. 1995); Sacks           
          v. Commissioner, supra; Steerman v. Commissioner, T.C. Memo.                
          1993-447; Rogers v. Commissioner, T.C. Memo. 1990-619; see also             
          the Plastics Recycling cases cited in Sann v. Commissioner,                 
          supra.                                                                      
               Bach has no education or work experience in engineering,               
          plastics materials, or plastics recycling.  His investigation of            
          the Plastics Recycling transactions and Plymouth consisted of a             
          review of the offering memorandum, plus a visit to the PI plant             
          and some end-users chosen by a PI representative.  Bach                     
          acknowledged that he does not "have a great technical background"           
          and that he "didn't understand the technicalities of the machine            
          too well even though it was explained to [him]".  Because of his            
          limited technical background, the only question he posed to the             
          end-users with whom he spoke was whether the machine broke down.            
               Bach indicated that he deferred to Gardino with respect to             
          the technical aspects of the Sentinel EPE recycler.  He claimed             
          that Gardino had a technical background, understood the                     
          technicalities of the machine, and "asked a lot of questions                
          about how the machine operates, what it does."  When asked if he            




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