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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 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 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, the Clearwater transaction was considered in
Provizer v. Commissioner, supra, and the Alters stipulated that
the Poly Reclamation transaction is substantially identical to
the Clearwater transaction. The underlying transactions in these
cases, and the Sentinel EPE recyclers purportedly leased by the
Partnerships, are the same type of transaction and same type of
machines considered in Provizer v. Commissioner, supra.
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