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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.
Although petitioners have not agreed to be bound by the
Provizer opinion, they have stipulated that their investments in
the Sentinel EPE recyclers were similar to the investment
described in Provizer, and, pursuant to their request, we have
taken judicial notice of our opinion in the Provizer case.
Petitioners invested in EI, a tier partnership that invested in
Clearwater. The underlying transaction in these cases (the
Clearwater transaction), and the Sentinel EPE recyclers
considered in these cases, are the same transaction and machines
considered in Provizer.
Issue 1. Admissibility of Expert Reports and Testimony
Before addressing the substantive issues in these cases, we
resolve an evidentiary issue. At trial, respondent offered in
evidence the expert opinions and testimony of Steven Grossman
(Grossman) and Richard Lindstrom (Lindstrom). At trial and in
their reply briefs, petitioners object to the admissibility of
the testimony and reports.
The expert reports and testimony of Grossman and Lindstrom
are identical to the testimony and reports in Fine v.
Commissioner, T.C. Memo. 1995-222. In addition, petitioners'
arguments with respect to the admissibility of the expert
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