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Although petitioners have not agreed to be bound by the
Provizer opinion, they have stipulated that their investment in
the Sentinel EPE recyclers in this case is similar to the
investment described in Provizer v. Commissioner, supra. The
underlying transactions in this case, and the Sentinel EPE
recyclers purportedly leased by Plymouth, are the same type of
transactions and same type of machines considered in Provizer v.
Commissioner, supra.
Based on the entire record in this case, including the
extensive stipulations, testimony of respondent's experts, and
petitioner's testimony, we hold that the Plymouth transaction was
a sham and lacked economic substance. In reaching this
conclusion, we rely heavily upon the overvaluation of the
Sentinel EPE recyclers. Respondent is sustained on the question
of the underlying deficiency. We note that petitioners have
explicitly conceded this issue in the stipulation of settled
issues filed shortly before trial. The record plainly supports
respondent's determination regardless of such concession. For a
detailed discussion of the facts and the applicable law in a
substantially identical case, see Provizer v. Commissioner,
supra.
A. Section 6653(a)--Negligence
Respondent asserted the additions to tax for negligence
under section 6653(a)(1) and (2) for 1981 in an amended answer.
Ordinarily, because these additions to tax were raised for the
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