- 11 -
substance and a business purpose, this Court relied heavily upon
the overvaluation of the Sentinel EPE recyclers.
Although petitioners have not agreed to be bound by the
Provizer opinion, they have stipulated that petitioner's
investment in the Sentinel EPE recyclers was similar to the
investment described in Provizer v. Commissioner, supra. The
underlying transaction in this case (the Northeast 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
cross-examination of them, and petitioner's testimony, we hold
that the Northeast 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 explicitly conceded this issue in a
Stipulation of Settled Issues filed shortly before trial. The
record plainly supports respondent's determination regardless of
such 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
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011