- 28 -
a tax shelter. Schluter’s own testimony supports this
conclusion. At trial, Schluter testified that he informed
Thornsjo, Woolf, and Furlong that Hamilton was a tax shelter. He
expressed certainty that each petitioner knew Hamilton was a tax
shelter. Thus it was not reasonable for petitioners to claim
substantial tax credits and partnership losses on the basis of
Schluter’s advice.
2. Thornsjo’s Own Investigation of Hamilton
Thornsjo also contends that he was not negligent because he
independently investigated the Hamilton transaction by consulting
with a Honeywell engineer and a colleague. These individuals did
not testify at trial. Moreover, Thornsjo has not provided any
evidence that indicates that these individuals had any expertise
with plastics or plastics recycling. Under these circumstances,
we do not believe that Thornsjo conducted a reasonable
independent investigation of Hamilton.
3. Petitioners’ Purported Profit Motive
In each of these cases, petitioners contend that they
invested in Hamilton for economic profit and as a source of
income for retirement. Each petitioner had an extensive business
background and had enjoyed a successful career. Furlong and
Woolf had been the heads of their own companies, and Thornsjo was
a senior executive at Honeywell. Accordingly, all three of these
petitioners were experienced businessmen who had been involved
Page: Previous 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 NextLast modified: May 25, 2011