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ranged in price from $20,000 to $200,000, including the Foremost
Densilator, Nelmor/Weiss Densification System (Regenolux), Buss-
Condux Plastcompactor, and Cumberland Granulator. See Provizer
v. Commissioner, T.C. Memo. 1992-177.
Becker was also told that PI had put an enormous amount of
research and development--10 to 12 years' worth--into the
creation and production of the Sentinel EPE recycler. When he
asked to see the cost records for some kind of independent
verification, however, his request was denied. Becker was
informed that such information was proprietary and secret, and
that he would just have to take PI's representations as true.
Although PI claimed that all of its information was a trade
secret, and that it never obtained patents on any of its
machines, PI had in fact obtained numerous patents prior to the
recycling transactions and had also applied for a trademark for
the Sentinel recyclers. Becker decided to accept PI's
representations after speaking with Miller (the corporate counsel
to PI), Canno (who had never been to PI's plant or seen a
Sentinel EPE recycler), and a surrogate judge from Rhode Island
who did business in the Boston/Cape Cod area (and who had no
expertise in engineering or plastics materials). Becker
testified that he was allowed to see PI's internal accounting
controls regarding the allocation of royalty payments and PI's
recordkeeping system in general. In Provizer v. Commissioner,
supra, this Court found that "PI had no cost accounting system or
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