Albert R. and Phyllis F. Dworkin - Page 11

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            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                                                              

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