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overstatements under I.R.C. �6659 and for negligence
under the applicable provisions of Section 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 preserve
their right to contest the issue of whether I.R.C.
�6659 is applicable under the facts and circumstances
of this case.
The issues remaining in this case are: (1) Whether
petitioners are liable for the additions to tax for negligence
under section 6653(a) for the years 1978, 1979, and 1980, and
under section 6653(a)(1) and (2) for 1981; and (2) whether
petitioners are liable for the addition to tax under section 6659
for underpayment of tax attributable to a valuation overstatement
for 1981.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulated facts and attached exhibits are incorporated
herein by this reference.
A. The Plastics Recycling Transactions
This case concerns petitioners' investment in Northeast
Resource Recovery Associates (Northeast), a limited partnership
that leased seven Sentinel expanded polyethylene (EPE) recyclers.
The transactions involving the Sentinel EPE recyclers leased by
Northeast are substantially identical to those in the Clearwater
Group limited partnership (Clearwater), the partnership
considered in Provizer v. Commissioner, supra. Petitioners have
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