- 59 -
inadequate information,16 research, and investigation, and were
subsequently rejected and discredited by their author.
Respondent likewise rejected the reports and considered them
unsatisfactory for any purpose, and there is no indication in the
records that respondent used them as a basis for any
determinations in the notices of deficiency. Even so, Snyder's
counsel obtained copies of these reports and urges that they
support the reasonableness of the values reported on Snyder's
returns. Not surprisingly, Snyder's counsel did not call
Carmagnola to testify in these cases,17 but preferred instead to
rely solely upon his preliminary ill-founded valuation estimates.
The Carmagnola reports were a part of the record considered by
this Court and reviewed by the Sixth Circuit Court of Appeals in
the Provizer case, where we held the taxpayers liable for the
section 6659 addition to tax. Consistent therewith, we find in
these cases, as we have found previously, that the reports
prepared by Carmagnola are unreliable and of no consequence.
16 In one preliminary report, Carmagnola states that he has "a
serious concern of actual profit" from a Sentinel EPE recycler
and that to determine whether the machines actually could be
profitable, he required additional information from PI.
Carmagnola also indicates that in preparing the report, he did
not have information available concerning research and
development costs of the machines and that he estimated those
costs in his valuations of the machines.
17 Carmagnola has not been called to testify in any of the
Plastics Recycling cases before us.
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