Robert H. Avellini - Page 14

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                                               OPINION                                                  
                  In Provizer v. Commissioner, T.C. Memo. 1992-177, a test                              
            case involving the Clearwater transaction and another tier                                  
            partnership, this Court (1) found that each Sentinel EPE recycler                           
            had a fair market value not in excess of $50,000, (2) held that                             
            the Clearwater transaction was a sham because it lacked economic                            
            substance and a business purpose, (3) upheld the section 6659                               
            addition to tax for valuation overstatement since the                                       
            underpayment of taxes was directly related to the overstatement                             
            of the value of the Sentinel EPE recyclers, and (4) held that                               
            losses and credits claimed with respect to Clearwater were                                  
            attributable to tax-motivated transactions within the meaning of                            
            section 6621(c).  In reaching the conclusion that the Clearwater                            
            transaction lacked economic substance and a business purpose,                               
            this Court relied heavily upon the overvaluation of the Sentinel                            
            EPE recyclers.                                                                              
                  Although petitioner has not agreed to be bound by the                                 
            Provizer opinion, he has stipulated that his investment in the                              
            Sentinel EPE recyclers was similar to the investment described in                           
            Provizer, and, pursuant to his request, we have taken judicial                              
            notice of our opinion in the Provizer case.  Petitioner invested                            
            in EI, a tier partnership that invested in Clearwater.  The                                 
            underlying transaction in this case (the Clearwater transaction),                           








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