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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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