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Commissioner, T.C. Memo. 1996-399; Zenkel v. Commissioner, T.C.
Memo. 1996-398.
The issues remaining in these consolidated cases are: (1)
Whether the assessments for 1982 are time-barred; (2) whether
petitioners are liable for the additions to tax for negligence
under section 6653(a)(1) and (2); and (3) whether petitioners are
liable for the additions to tax under section 6659 for
underpayments of tax attributable to valuation overstatements.
FINDINGS OF FACT
Some of the facts have been stipulated in each case and are
so found. The stipulated facts and attached exhibits are
incorporated in the respective cases by this reference.
A. The Plastics Recycling Transactions
These cases concern petitioners' indirect investments in
three limited partnerships that leased Sentinel expanded
polyethylene (EPE) recyclers: Empire Associates (Empire),
Plymouth Equipment Associates (Plymouth), and Foam Recycling
Associates (Foam). For convenience we refer to these
partnerships collectively as the Partnerships.
Petitioners acquired their indirect interests in the
Partnerships through three other partnerships: S&H Empire (a
tier of Empire), Plymouth Partners (a tier of Plymouth), and
Jabrilach Recycling (a tier of Foam).
The transactions involving the Sentinel EPE recyclers
purportedly leased by the Partnerships are substantially
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