- 36 - F.3d (4th Cir. June 23, 1997), affg. T.C. Memo. 1996-167, and sustaining findings of negligence in a similar transaction. In contrast, petitioners and their purported adviser did not have any personal insight or industry know-how in plastics recycling that would reasonably lead them to believe that the Plastics Recycling transactions would be economically profitable. Further, neither Bach nor petitioners consulted or hired any independent experts in the field of plastic materials or plastics recycling.5 Instead, they relied upon the offering materials and representations by insiders to the Plastics Recycling transactions. We consider petitioners' arguments with respect to Mollen v. United States, supra, inapplicable under the circumstances of this case, particularly in light of the opinion of the Court of Appeals for the Fourth Circuit in Zfass v. Commissioner, supra. Petitioners' reliance upon the Court of Appeals for the Ninth Circuit's partial reversal of our decision in Osterhout v. Commissioner, T.C. Memo. 1993-251, affd. in part and revd. in part without published opinion sub nom. Balboa Energy Fund 1981 v. Commissioner, 85 F.3d 634 (9th Cir. 1996), is misplaced. In Osterhout, we found that certain oil and gas partnerships were 5 Bach testified that he discussed the Plastics Recycling transactions and visited PI with Gardino, whom he claims had a technical background. However, Gardino did not testify in this case, and the record does not show that he was qualified to analyze the Sentinel EPE recycler or the Plastics Recycling transactions.Page: Previous 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 Next
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