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recyclers (i.e., $7,000,000 for four recyclers ) should have made
petitioner question their value. Furthermore, as the offering
memorandum advised, the Dickinson transactions would be executed
simultaneously, in what was essentially nothing other than a
circular flow of payments made only through bookkeeping entries.
We are also convinced that petitioner invested in Dickinson
principally because the investment offered immediate tax benefits
in excess of his $50,000 investment. Thus, the offering
memorandum promised an investor who purchased a single
partnership unit, tax benefits in 1982 in the form of investment
credits in the aggregate amount of $77,000 and tax deductions
(i.e., a partnership loss) in the amount of $38,940. On their
1982 return, petitioners actually claimed investment credits in
the aggregate amount of $77,001 and a partnership loss in the
amount of $39,155. These tax benefits served to reduce
petitioners’ income tax as reported on their 1982 return by
$96,583. Through this reduction in tax petitioners realized a
sum approximating 200 percent of their investment in about 4
months.
Finally, mention should be made of two Plastics Recycling
cases that were decided after petitioners’ briefs were filed;
namely, Thompson v. United States, 223 F.3d 1206 (10th Cir.
2000), and Klein v. United States, 94 F. Supp. 2d 838 (E.D. Mich.
2000).
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