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section references are to the Internal Revenue Code in effect for
the tax years in issue, unless otherwise indicated. All Rule
references are to the Tax Court Rules of Practice and Procedure.
The Court agrees with and adopts the opinion of the Special Trial
Judge, which is set forth below.
OPINION OF THE SPECIAL TRIAL JUDGE
WOLFE, Special Trial Judge: These cases are part of the
Plastics Recycling group of cases. For a detailed discussion of
the transactions involved in the Plastics Recycling cases, see
Provizer v. Commissioner, T.C. Memo. 1992-177, affd. without
published opinion 996 F.2d 1216 (6th Cir. 1993). The underlying
transactions in these cases are substantially identical to the
transaction considered in the Provizer case.
In a notice of deficiency dated January 11, 1990, respondent
determined a deficiency in the 1982 joint Federal income tax of
petitioners Philippe and Nadine Grelsamer and additions to tax
for that year under section 6653(a)(1)(A) and (B) for negligence
and under section 6659 for valuation overstatement (and in the
alternative thereto under section 6661 for substantial
underpayment). Respondent also determined that interest on
deficiencies accruing after December 31, 1984, would be
calculated at 120 percent of the statutory rate under section
6621(c). In her answer to petition, respondent asserted a lesser
deficiency in the amount of $26,223 as well as reduced additions
to tax in the amount of $6,949 under section 6659, in the amount
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