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this Court relied heavily upon the overvaluation of the Sentinel
EPE recyclers.
The underlying transaction in these cases (the Hyannis
transaction) is in all material respects identical to the
transaction considered in the Provizer case. The Sentinel EPE
recyclers considered in these cases are the same type of machines
considered in the Provizer case.
Based on the entire records in these cases, including the
extensive stipulations, testimony of respondent's experts, and
petitioners' testimony, we hold that the Hyannis 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 deficiencies. We note that petitioners have
explicitly conceded this issue in their respective Stipulations
of Settled Issues filed shortly before trial. The record plainly
supports respondent's determinations regardless of such
concessions. 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
In a notice of deficiency, respondent determined that
petitioners Berry were liable for the negligence additions to tax
under section 6653(a)(1) and (2) for 1981. Petitioners have the
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