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3. This stipulation resolves all issues that relate to
the items claimed on petitioners' tax returns resulting
from their participation in the Plastics Recycling
Program, with the exception of petitioners' potential
liability for additions to the tax for valuation
overstatements under I.R.C. �6659 and for negligence
under the applicable provisions of �6653(a).
4. With respect to the issue of the addition to the
tax under I.R.C. �6659, petitioners do not intend to
contest the issue of the value of the Sentinel Recycler
or the existence of a valuation overstatement on the
petitioners' return; however, petitioners preserve
their right to contest the issue of whether I.R.C.
�6659 is applicable under the facts and circumstances
of this case.[4]
The only issues remaining in these consolidated cases are:
(1) Whether petitioners are liable for the additions to tax for
negligence or intentional disregard of rules or regulations under
section 6653(a)(1) and (2); and (2) whether petitioners are
liable for the addition to tax under section 6659 for an
underpayment of tax attributable to valuation overstatement.
Farrell's motion for decision, based in general upon
circumstances not discussed herein, has been denied for reasons
set forth in Farrell v. Commissioner, T.C. Memo. 1996-295.
4 The stipulation executed by respondent and Farrell refers
specifically to their 1982 tax returns. Also, the last clause of
the fourth stipulation reads: "however, petitioners preserve
their right to argue that the underpayment in tax is not
attributable to a valuation overstatement within the meaning of
I.R.C. �6659(a)(1), and that the Secretary should have waived the
addition to tax pursuant to the provisions of I.R.C. �6659(e)."
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