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For reasons set forth in Fine v. Commissioner, supra, we
hold that the reports and testimony of Grossman and Lindstrom are
relevant and admissible and that Grossman and Lindstrom are
experts in the fields of plastics, engineering, and technical
information. We do not, however, accept Grossman or Lindstrom as
experts with respect to the ability of the average person, who
has not had extensive education in science and engineering, to
conduct technical research, and we have limited our consideration
of their reports and testimony to the areas of their expertise.
We also hold that Grossman's report meets the requirements of
Rule 143(f).
Issue 3. Deductions and Tax Credits With Respect to EI and
Clearwater
The underlying transaction in this case is substantially
identical in all respects to the transaction in Provizer v.
Commissioner, supra. The parties have stipulated the facts
concerning the deficiency essentially as set forth in our
Provizer opinion. Based on this record, we hold that the
Clearwater transaction was a sham and lacked economic substance.
In reaching this conclusion, we rely heavily upon the
overvaluation of the Sentinel EPE recyclers. Accordingly,
respondent is sustained on the issue with respect to the
underlying deficiency for 1981. Moreover, we note that
petitioner has stated his concession of this issue on brief. The
record plainly supports respondent's determination regardless of
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