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There is no indication that petitioner took any steps to
ensure that, or even to inquire whether, the recyclers were
actually placed with end-users. Surely, concern for the
environment would have led him to do so. Based on the record, we
do not think that petitioner would have invested in the
Partnerships were it not for the prospect of the sizable tax
benefits that the Partnerships offered. Thus, even if petitioner
were enthusiastic about recycling, petitioner did not act
reasonably by claiming deductions and credits with respect to the
Partnerships.
D. Conclusion Regarding Negligence.
In view of his sophistication and educational background,
petitioner learned or should have learned that the Sentinel
recyclers were not unique, that they were not worth in excess of
$50,000 each, and that Plymouth and Taylor lacked economic
substance and had no potential for profit. Therefore, under the
circumstances of these cases, petitioner failed to exercise due
care in claiming loss deductions and tax credits with respect to
the Partnerships on his Federal income tax returns for 1981
through 1984. Taking all of the above factors into
consideration, we think it is more likely than not that
petitioner invested in the Partnerships in an effort to generate
tax benefits, rather than to make a profit.
Upon consideration of the entire record, we hold that
petitioner is liable for the additions to tax for negligence
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