- 68 -
Petitioners' reliance on McCrary v. Commissioner, supra, is
rejected.17
We held in Provizer v. Commissioner, supra, that each
Sentinel EPE recycler had a fair market value not in excess of
$50,000. Our finding in the Provizer case that the Sentinel EPE
recyclers had been overvalued was integral to and inseparable
from our holding of a lack of economic substance. The Clearwater
transaction was considered in the Provizer case, and Alter
stipulated that the Poly Reclamation transaction is substantially
identical to the Clearwater transaction. In addition,
petitioners each stipulated that the fair market value of a
Sentinel EPE recycler in 1981 was not in excess of $50,000.
Given those concessions, and the fact that the records here
plainly show that the overvaluations of the recyclers were the
only reason for the disallowance of the claimed tax benefits, we
conclude that the deficiencies were attributable to overvaluation
of the Sentinel EPE recyclers.
3. Section 6659(e)
17 Petitioners' citation of Heasley v. Commissioner, supra, in
support of the concession argument is also rejected. That case
was not decided by the Court of Appeals for the Fifth Circuit on
the basis of a concession. Moreover, see supra note 15 to the
effect that the Court of Appeals for the Second Circuit and this
Court have not followed the Heasley opinion with respect to the
application of sec. 6659.
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