- 54 -
available to him at that time, Carmagnola preliminarily estimated
that the value of the Sentinel EPE recycler was $250,000.
However, after additional information became available to him,
Carmagnola concluded in a signed affidavit, dated March 16, 1993,
that the machines actually had a fair market value of not more
than $50,000 each in the fall of 1981 and 1982.
We accord no weight to the Carmagnola reports submitted by
Spears. The projected valuations therein were based on
inadequate information,25 research, and investigation, and were
subsequently rejected and discredited by their author.
Respondent likewise rejected the reports and considered them
unsatisfactory for any purpose; and there is no indication in the
records that respondent used them as a basis for any
determinations in the notices of deficiency. Even so, Spears'
counsel obtained copies of these reports and urges that they
support the reasonableness of the values reported on Spears' 1982
joint return. Not surprisingly, Spears' counsel did not call
Carmagnola to testify in these cases,26 but preferred instead to
25 In one preliminary report, Carmagnola states that he has "a
serious concern of actual profit" from a Sentinel EPE recycler
and that to determine whether the machines actually could be
profitable, he required additional information from PI.
(Emphasis in original.) Carmagnola also indicates that in
preparing the report, he did not have information available
concerning research and development costs of the machines and
that he estimated those costs in his valuations of the machines.
26 Carmagnola has not been called to testify in any of the
Plastics Recycling cases before us.
Page: Previous 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 NextLast modified: May 25, 2011