David and Shirley Singer - Page 5

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          stipulation of settled issues, we consider that any statute of              
          limitations defense has been conceded by petitioners.                       
               The issues remaining in this case are:  (1) Whether                    
          petitioners are liable for the additions to tax for negligence              
          under section 6653(a)(1) and (2); and (2) whether petitioners are           
          liable for the addition to tax under section 6659 for                       
          underpayment of tax attributable to a valuation overstatement.              
                                  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 Plymouth                 
          Equipment Associates (Plymouth), a limited partnership that                 
          leased seven Sentinel expanded polyethylene (EPE) recyclers.  The           
          transactions involving the Sentinel EPE recyclers leased by                 
          Plymouth are substantially identical to those in the Clearwater             
          Group limited partnership (Clearwater), the partnership                     
          considered in Provizer v. Commissioner, T.C. Memo. 1992-177.                
          Petitioners have stipulated substantially the same facts                    
          concerning the underlying transactions as we found in the                   
          Provizer case.                                                              
               In transactions closely resembling those in the Provizer               
          case, Packaging Industries, Inc. (PI), manufactured and sold                
          seven Sentinel EPE recyclers to ECI Corp. for $981,000 each.  ECI           




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