Albert R. and Phyllis F. Dworkin - Page 2

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            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                                                     

                  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                               

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