- 19 -
discouraged after about maybe a year and a half or 2 years into
this deal". He "gave up after that point because then it really
became apparent that the price of crude [oil] was really
declining." Petitioners never made a profit in any year from
their participation in Northeast.
OPINION
We have decided a large number of the Plastics Recycling
group of cases. Provizer v. Commissioner, T.C. Memo. 1992-177,
affd. without published opinion 996 F.2d 1216 (6th Cir. 1993),
concerned the substance of the partnership transaction and also
the additions to tax. See also Singer v. Commissioner, T.C.
Memo. 1997-325; Gottsegen v. Commissioner, T.C. Memo. 1997-314;
Greene v. Commissioner, T.C. Memo. 1997-296; Kaliban v.
Commissioner, T.C. Memo. 1997-271; Sann v. Commissioner, T.C.
Memo. 1997-259 (and cases cited therein). The majority of these
cases, like the present case, raised issues regarding additions
to tax for negligence and valuation overstatement. We have found
the 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
Page: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NextLast modified: May 25, 2011