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plastic, the plastic scrap may or may not be recyclable.
Finally, petitioner learned that certain plastic products could
be made only from virgin plastic resins, whereas other products
could be made from recycled plastic resins. Consolidated did not
use expanded polyethylene foam in its operations.
Shortly after graduating from law school, petitioner
represented the Society of the Plastics Industry (SPI) against
the City of New York regarding the imposition of a 2-cent tax on
every plastic container sold in the city. The New York Supreme
Court held the tax provision to be unconstitutional and ultra
vires to the city council, and the decision was affirmed by the
New York Appellate Division. For a 10-year period starting in
1975, petitioner represented British Petroleum Company (BP) in an
antitrust suit and a contract arbitration.
Petitioner became involved in Clearwater in 1981 after being
introduced to Winer by Stuart Hirshfield (Hirshfield), a partner
in his law firm. Hirshfield had previously invested in an
equipment leasing transaction in which Winer was a general
partner. Petitioner did not see a Sentinel EPE recycler before
investing in Clearwater. Petitioner never made a profit in any
year from his investment in Clearwater.
On their 1981 return, petitioners claimed a net Schedule E
partnership loss of $10,002 from the Clearwater investment.
Further, petitioners claimed investment and energy tax credits
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