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(1985), affd. per curiam without published opinion 795 F.2d 1005
(2d Cir. 1986); Provizer v. Commissioner, supra.
As we held in Provizer, a tax-motivated transaction
includes any sham or fraudulent transaction. See sec.
6621(c)(3)(A)(v). We have held that the Plastics Recycling
leasing program to which petitioner's 1981 underpayment is
attributable was a sham transaction. The tax-motivated increased
rate of interest is therefore clearly applicable. Accordingly,
we sustain respondent on this issue.5
Issue (3) Section 6653(a)(1) and (2) Negligence
Respondent determined that petitioner is liable for
additions to tax under section 6653(a)(1) and (2) with respect to
the underpayment attributable to petitioner's investments in
Plymouth for 1981 and in Taylor for 1982 through 1984.
Petitioner contends that he was not negligent because: (1) Based
on his independent investigation he reasonably expected to make a
profit from his investment in the transactions; (2) he reasonably
relied upon advice from certain individuals; and (3) he acted
reasonably in light of his passion for recycling and his concern
for the environment.
5 We note that a tax-motivated transaction also includes
any valuation overstatement within the meaning of sec. 6659(c).
See sec. 6621(c)(3)(A)(i). It is apparent that there were such
valuation overstatements in the present cases. See the
discussion under Issue (4), infra, regarding sec. 6659.
Accordingly, respondent's determination could also be sustained
on this alternative basis.
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