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documents Mr. Greer reviewed prior to purchasing an interest in
Madison Recycling Associates (Madison). On December 16, 1982, Mr.
Greer executed a check payable to Madison in the amount of
$50,000. This check purchased a 5.5-percent limited partnership
unit in Madison.
The offering memorandum sets forth warnings to potential
purchasers, including Mr. Greer, of risks involved, informing
these purchasers that “There is a substantial likelihood that the
Service will audit the federal income tax returns filed by the
partnership and each limited partner.” Other warnings provided:
(a) This offering involves a high degree of risk. See
certain business risks and tax risks and consequences;
(b) an investment in the partnership involves a high
degree of risk and should only be considered by those
who could afford to lose their cash investment and
anticipated tax benefits;
(c) the draft legal opinion attached to the private
offering memorandum was prepared for the general
partner’s use only and should not be relied upon by
potential investors;
(d) prospective purchasers should not consider the
contents of the offering memorandum or any other
communications from the partnership or general partner
as legal, tax, accounting, or other expert advice;
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Last modified: November 10, 2007