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2. The underpayments in income tax attributable to
petitioners' participation in the Plastics Recycling
Program are substantial underpayments attributable to
tax motivated transactions, subject to the increased
rate of interest established under I.R.C. �6621(c),
formerly �6621(d).
3. This stipulation resolves all issues that relate to
the items claimed on petitioners' tax returns resulting
from their participation in the Plastics Recycling
Program, with the exception of petitioners' potential
liability for additions to the tax for valuation
overstatements under I.R.C. �6659 and for negligence
under the applicable provisions of �6653(a).
4. With respect to the issue of the addition to the
tax under I.R.C. �6659, the petitioners do not intend
to contest the value of the Sentinel Recycler or the
existence of a valuation overstatement on the
Petitioners' returns; however, Petitioners reserve
their right to argue that the underpayment in tax is
not attributable to a valuation overstatement within
the meaning of I.R.C. �6659(a)(1), and that the
Secretary should have waived the addition to tax
pursuant to the provisions of I.R.C. �6659(e).
Long after the trials of these cases, in each case
petitioners filed a Motion For Leave To File Motion For Decision
Ordering Relief From the Negligence Penalty and the Penalty Rate
of Interest and To File Supporting Memorandum of Law under Rule
50. These motions were filed with attached exhibits in October
and November of 1995. Petitioners concurrently lodged with the
Court motions for decision ordering relief from the additions to
tax for negligence and the increased rate of interest, with
attachments and memoranda in support of the motions.
Subsequently, respondent filed objections, with attachments and
memoranda in support thereof, and petitioners thereafter filed
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