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favorable results for taxpayers.7
In Provizer v. Commissioner, T.C. Memo. 1992-177, a test
case for the Plastics Recycling group of cases, this Court (1)
found that each Sentinel EPE recycler had a fair market value not
in excess of $50,000, (2) held that the transaction, which is
almost identical to the Partnership transactions in this case,
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 transaction lacked economic
substance and a business purpose, this Court relied heavily upon
7 In Zidanich v. Commissioner, T.C. Memo. 1995-382, we held
the taxpayers liable for the sec. 6659 addition to tax, but not
liable for the negligence additions to tax under sec. 6653(a).
As indicated in our opinion, the Zidanich case, and the Steinberg
case consolidated with it for opinion, involved exceptional
circumstances.
In Estate of Satin v. Commissioner, supra, and Fisher v.
Commissioner, supra, after the decision in Provizer v.
Commissioner, supra, the taxpayers were allowed to elect to
accept a beneficial settlement because of exceptional
circumstances. In Farrell v. Commissioner, supra, we rejected
taxpayers' claim to a similar belated settlement arrangement
since the circumstances were different and taxpayers previously
had rejected settlement and elected to litigate the case. See
also Jaroff v. Commissioner, supra; Gollin v. Commissioner,
supra; Grelsamer v. Commissioner, supra; Zenkel v. Commissioner,
supra; Baratelli v. Commissioner, supra.
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