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intellect, skills, experience, and resources to have the
viability of the SAB Foam transactions thoroughly investigated
either by himself or by an independent qualified expert.
Petitioners claim that they relied on Becker, known through Cohen
and Feinberg, for the bona fides and viability of the SAB Foam
transactions. Yet Becker’s expertise was in taxation, not
plastics materials or plastics recycling, and his investigation
and analysis of the Plastics Recycling transactions reflected
this circumstance. Moreover, Becker indicated that he was
careful not to mislead any of his clients regarding the
particulars of his limited investigation. As he put it: “I
don’t recall saying to a client I did due diligence * * *
[Rather,] I told [my clients] precisely what I had done to
investigate or analyze the transaction. I didn’t just say I did
due diligence, and leave it open for them to define what I might
or might not have done.”
The purported value of the recyclers generated the
deductions and credits in this case, and that circumstance was
clearly reflected in the memorandum. Certainly Becker recognized
the nature of the tax benefits and, given his education and
experience, petitioner should have recognized it as well. Yet
petitioner, Cohen, Feinberg, and Becker neglected to verify the
purported value of the recyclers. Becker confirmed in his
testimony incorporated in this record by stipulation that he
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