Paul L. and Doris J. Triemstra, et al. - Page 12

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          plastics business.  Cohn never saw a Sentinel EPE recycler and              
          never asked to see one.  He never visited an end-user.  Despite             
          his many years in the syndication business and his great success            
          in that business, with respect to the Northeast transaction, Cohn           
          "did not spend hours and hours pouring over" the offering                   
          memorandum, but simply relied on Kravitz.                                   
               In Provizer v. Commissioner, T.C. Memo. 1992-177, a test               
          case involving the Clearwater transaction and another tier                  
          partnership, this Court (1) found that each Sentinel EPE recycler           
          had a fair market value not in excess of $50,000, (2) held that             
          the Clearwater transaction was a sham because it lacked economic            
          substance and a business purpose, (3) upheld the section 6659               
          addition to tax for valuation overstatement since the                       
          underpayment of taxes was directly related to the overstatement             
          of the value of the Sentinel EPE recyclers, and (4) held that               
          losses and credits claimed with respect to Clearwater were                  
          attributable to tax-motivated transactions within the meaning of            
          section 6621(c).  In reaching the conclusion that the Clearwater            
          transaction lacked economic substance and a business purpose,               
          this Court relied heavily upon the overvaluation of the Sentinel            
          EPE recyclers.                                                              
               The underlying transaction in these cases (the Northeast               
          transaction) is in all material respects identical to the                   
          transaction considered in the Provizer case.  The Sentinel EPE              

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