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A. The Whitman Transactions
These cases are part of the Plastics Recycling group of
cases. In particular, the additions to tax arise from the
disallowance of losses, investment credits, and energy credits
claimed by petitioners with respect to a partnership known as
Whitman Recycling Associates (Whitman or the partnership).
For a detailed discussion of the transactions involved in
the Plastics Recycling group of cases, see Provizer v.
Commissioner, T.C. Memo. 1992-177, affd. per curiam without
published opinion 996 F.2d 1216 (6th Cir. 1993). The underlying
transactions involving the Sentinel recycling machines
(recyclers) in petitioners’ cases are substantially identical to
the transactions in Provizer v. Commissioner, supra, and, with
the exception of certain facts that we regard as having minimal
significance, petitioners have stipulated substantially the same
facts concerning the underlying transactions that were described
in Provizer v. Commissioner, supra.
In a 4-step series of simultaneous transactions closely
resembling those described in the Provizer case and stipulated by
the parties herein, Packaging Industries of Hyannis,
Massachusetts (PI) manufactured and sold2 four Sentinel
2 Terms such as sale and lease, as well as their
derivatives, are used for convenience only and do not imply that
the particular transaction was a sale or lease for Federal tax
purposes. Similarly, terms such as joint venture and agreement
(continued...)
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