Leon and Belle Atkind - Page 10

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            transaction lacked economic substance and a business purpose,                               
            this Court relied heavily upon the overvaluation of the Sentinel                            
            EPE recyclers.                                                                              
                  The underlying transaction in this case (the Hyannis                                  
            transaction) is in all material respects identical to the                                   
            transaction considered in the Provizer case.  The Sentinel EPE                              
            recyclers considered in this case are the same type of machines                             
            considered in the Provizer case.                                                            
                  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 Hyannis 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 petitioner has                                  
            conceded this issue in a Stipulation of Settled Issues filed                                
            shortly before trial.  The record plainly supports respondent's                             
            determination regardless of this concession.  For a detailed                                
            discussion of the facts and the applicable law in a substantially                           
            identical case, see Provizer v. Commissioner, supra.                                        
            Issue 1.  Sec. 6653(a) Negligence                                                           
                  Respondent determined that petitioners were liable for the                            
            additions to tax under section 6653(a)(1) and (2).  Petitioners                             
            have the burden of proving that respondent's determination of an                            
            addition to tax is erroneous.  Rule 142(a); Luman v.                                        
            Commissioner, 79 T.C. 846, 860-861 (1982).                                                  

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