- 18 -
$50,000; (2) held that the transaction, which is almost identical
to the transactions in this case, was a sham because it lacked
economic substance and a business purpose; (3) upheld the section
6653(a)(1) and (2) additions to tax for negligence; (4) 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 (5)
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
transaction lacked economic substance and a business purpose,
this Court relied heavily upon the overvaluation of the Sentinel
EPE recyclers.
Since our opinion in Provizer v. Commissioner, supra, we
have decided numerous Plastics Recycling cases and, with one
exception, have found the taxpayers liable for the addition to
tax under section 6653(a). See Friedman v. Commissioner, T.C.
Memo. 1996-558, and cases cited therein; see also Henry v.
Commissioner, T.C. Memo. 1997-86; Skyrms v. Commissioner, T.C.
Memo. 1997-69. Set against this background, we consider whether
the addition to tax for negligence should be imposed on any
petitioners.
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011