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testimony and reports are identical to the arguments made in the
Fine case. For discussions of the reports and testimony, see
Fine v. Commissioner, supra, and Provizer v. Commissioner, supra.
For a discussion of the testimony and petitioners' arguments
concerning the admissibility of the testimony and reports, see
Fine.
For reasons set forth in Fine v. Commissioner, supra, we
hold that the reports and testimony of Grossman and Lindstrom are
relevant and admissible, and that Grossman and Lindstrom are
experts in the fields of plastics, engineering, and technical
information. We do not, however, accept Grossman and Lindstrom
as experts with respect to the ability of the average person, who
has not had extensive education in science and engineering, to
conduct technical research, and we have limited our consideration
of their reports and testimony to the areas of their expertise.
We also hold that Grossman's report meets the requirements of
Rule 143(f).
Issue 2. Deductions and Tax Credits With Respect to EI and
Clearwater
The underlying transaction in these cases is substantially
identical in all respects to the transaction in Provizer v.
Commissioner, supra. The parties have stipulated the facts
concerning the deficiencies essentially as set forth in our
Provizer opinion. Based on these records, we hold that the
Clearwater transaction was a sham and lacked economic substance.
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