- 16 -
On December 9, 1991, respondent issued a notice of final
partnership administrative adjustment (FPAA) to SAB Management
for 1982. In the FPAA, respondent disallowed all items of
income, losses, deductions, and credits reported with respect to
SAB Foam’s equipment leasing activities for 1982. Accordingly,
respondent: (1) Increased ordinary income by $662,556; (2)
determined that SAB Foam’s investment and business energy tax
credits with respect to the recycling equipment were zero,
instead of the $7 million claimed as the qualified investment on
the partnership tax return; and (3) increased SAB Foam’s “other
income” by $5,626.
Subsequently, SAB Foam’s TMP filed a petition with the
Court. On September 7, 1993, the Court entered a decision in SAB
Foam Recycling Associates 1982 v. Commissioner, docket No. 5103-
92. This decision reflected a full concession by SAB Foam of all
items of income (loss) and credit previously claimed for the
partnership.
E. Petitioner’s Introduction to Plastics Recycling
In 1981 and 1982, petitioner, Cohen, and Lewin were partners
in LFC. In 1981 Becker retained petitioner to advise him for his
own protection relating to SAB Resource, a limited partnership
structured substantially like SAB Foam. Petitioner received the
offering materials for SAB Resource and, according to his
testimony, performed a “very, very careful and detailed study of
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NextLast modified: May 25, 2011