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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 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
overstatement since the underpayment of taxes was directly
related to the overstatement of the value of the Sentinel EPE
recyclers, and (4) held that losses and credits claimed with
respect to Clearwater were attributable to tax-motivated
transactions within the meaning of section 6621(c). In reaching
the conclusion that the Clearwater transaction lacked economic
substance and a business purpose, this Court relied heavily upon
the overvaluation of the Sentinel EPE recyclers.
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