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Although petitioners have not agreed to be bound by the
Provizer opinion, they have stipulated that the investments in
the Sentinel EPE recyclers in these cases are similar to the
investment described in Provizer v. Commissioner, supra. The
underlying transactions in these consolidated cases, and the
Sentinel EPE recyclers considered in these cases, are the same
type of transaction and same type of machine considered in
Provizer v. Commissioner, supra.
Based on the entire records in these cases, including the
extensive stipulations, testimony of respondent's experts, and
petitioners' testimony, we hold that each of the Partnership
transactions herein was a sham and lacked economic substance. In
reaching this conclusion, we rely heavily upon the overvaluation
of the Sentinel EPE recyclers. Respondent is sustained on the
question of the underlying deficiencies. We note that
petitioners have explicitly conceded this issue in their
respective stipulations of fact and stipulations of settled
issues filed shortly before trial. The record plainly supports
respondent's determinations in these cases regardless of such
concessions. For a detailed discussion of the facts and the
applicable law in a substantially identical case, see Provizer v.
Commissioner, supra.
Issue 1. Section 6653(a) Negligence
In notices of deficiency, respondent determined that
petitioners were liable for additions to tax for negligence under
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