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information available concerning research and development costs
of the machines and that he estimated those costs in his
valuations of the machines.
Respondent rejected the Carmagnola 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,
petitioners' counsel obtained copies of these reports and urge
that they support the reasonableness of the values reported on
petitioners' returns. Not surprisingly, petitioners' counsel did
not call Carmagnola to testify in these cases, but preferred
instead to rely solely upon his preliminary, ill-founded
valuation estimates. Carmagnola has not been called to testify
in any of the Plastics Recycling cases before us. The Carmagnola
reports were a part of the record considered by this Court and
reviewed by the Court of Appeals for the Sixth Circuit in the
Provizer case, where we held the taxpayers negligent. Consistent
therewith, we find in these cases, as we have found previously,
that the reports prepared by Carmagnola are unreliable and of no
consequence. Petitioners are not relieved of the negligence
additions to tax based on the preliminary reports prepared by
Carmagnola.
Petitioners rely on Reile v. Commissioner, T.C. Memo. 1992-
488, Davis v. Commissioner, T.C. Memo. 1989-607, and Mollen v.
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