- 45 -
the Tax Opinion states that it relies upon the Appraisal
regarding the residual value of the equipment and cash-
flow therefrom on or after the end of the master leases,
despite the failure of the Appraisal to provide any such
determination. Considering the problems that we noted in
the documents relating to this transaction, which are
described above, we do not believe that it would be
reasonable for an investor to rely on the Tax Opinion,
nor do we believe that an investor who did so would be
acting in good faith. See Mele v. Commissioner, T.C.
Memo. 1988-409.
Second, according to the testimony of petitioner
and five other unitholders, at least 10 partners of the
accounting firm were actively involved in analyzing the
Investment Memorandum and the other documents relating to
the subject investment. Mr. Crumlish also testified that
"associates" of the accounting firm were involved in
"looking at the projections and making sure that those
projections were, you know, properly calculated and that
the assumptions weren't unreasonable and that type of
thing." Notwithstanding that alleged scrutiny by
sophisticated accountants and lawyers, none of the unit-
holders who testified at the first trial detected any
of the problems with the Appraisal, the Tax Opinion,
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