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taxpayers liable for such additions to tax in all but one of the
opinions to date on these issues.
In Provizer v. Commissioner, supra, a test case for the
Plastics Recycling group of cases, this Court (1) found that each
Sentinel EPE recycler had a fair market value not in excess of
$50,000, (2) held that the Clearwater transaction was a sham
because it lacked economic substance and a business purpose, (3)
upheld the section 6659 addition to tax for valuation
overstatement since the underpayment of taxes was directly
related to the overstatement of the value of the Sentinel EPE
recyclers, and (4) held that losses and credits claimed with
respect to Clearwater were attributable to tax-motivated
transactions within the meaning of section 6621(c). In reaching
the conclusion that the Clearwater transaction lacked economic
substance and a business purpose, this Court relied heavily upon
the overvaluation of the Sentinel EPE recyclers.
Although petitioners have not agreed to be bound by the
Provizer opinion, they have stipulated that the investment in the
Sentinel EPE recyclers in this case is similar to the investment
described in Provizer v. Commissioner, supra. The underlying
transactions in this case, and the Sentinel EPE recyclers
purportedly leased by Resource, are the same type of transactions
and same type of machines considered in Provizer v. Commissioner,
supra.
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