- 2 -
and adopts the opinion of the Special Trial Judge, which is set
forth below.
OPINION OF THE SPECIAL TRIAL JUDGE
WOLFE, Special Trial Judge: This case is part of the
Plastics Recycling group of cases. For a detailed discussion of
the transactions involved in the Plastics Recycling cases, see
Provizer v. Commissioner, T.C. Memo. 1992-177, affd. without
published opinion 996 F.2d 1216 (6th Cir. 1993). The underlying
transaction in this case is substantially identical to the
transaction considered in the Provizer case.
In a notice of deficiency, respondent determined a
deficiency in petitioners' joint 1981 Federal income taxes in the
amount of $83,294, and additions to tax for that year in the
amount of $21,296 under section 6659 for valuation overstatement,
in the amount of $4,165 under section 6653(a)(1) for negligence,
and under section 6653(a)(2) in an amount equal to 50 percent of
the interest due on the underpayment attributable to negligence.
Respondent also determined that interest on deficiencies accruing
after December 31, 1984, would be calculated at 120 percent of
the statutory rate under section 6621(c).2
2
The notice of deficiency refers to sec. 6621(d). This
section was redesignated as sec. 6621(c) by sec. 1511(c)(1)(A) of
the Tax Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2085, 2744
and repealed by sec. 7721(b) of the Omnibus Budget Reconciliation
Act of 1989 (OBRA 89), Pub. L. 101-239, 103 Stat. 2106, 2399,
effective for tax returns due after Dec. 31, 1989, OBRA 89 sec.
7721(d), 103 stat. 2400. The repeal does not affect the instant
(continued...)
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