- 16 -
Respondent also disallowed all of the investment tax credit
carrybacks claimed by petitioners. Respondent also determined
that petitioners were liable for additions to tax as set forth in
the opening paragraphs of this opinion and that the
increased rate of interest under section 6621(c) was applicable
to each year in issue.
Petitioners have stipulated substantially the same facts
concerning the underlying transactions as we found in Provizer v.
Commissioner, T.C. Memo. 1992-177, with the exception of certain
facts concerning the Provizers, the expert opinions, and other
matters that we consider of minimal significance.
Those facts may be summarized as follows. In 1981, PI
manufactured and sold six Sentinel EPE Recyclers to ECI Corp. for
$981,000 each. ECI Corp., in turn, resold the recyclers to F&G
Corp. for $1,162,666 each. F&G Corp. then leased the recyclers
to Clearwater, which licensed the recyclers to FMEC Corp., which
sublicensed them back to PI. The sales of the recyclers from PI
to ECI Corp. were financed with nonrecourse notes. Approximately
7 percent of the sales price of the recyclers sold by ECI Corp.
to F&G Corp. was paid in cash with the remainder financed through
notes. These notes provided that 10 percent of the notes were
recourse but that the recourse portion of the notes was only due
after the nonrecourse portion, 90 percent, was paid in full.
All of the monthly payments required among the entities in
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NextLast modified: May 25, 2011