- 25 -
that the prices of the Sentinel recyclers were reasonable.
Petitioner refers to the marketing axiom that a product may be
priced at any amount that the market will bear. Petitioner
points out that the market will sometimes bear a very high price
for a unique product because the product satisfies a void in the
marketplace.
Although we do not disagree with these general maxims of
marketing, petitioner has not pointed to any specific facts that
would support the conclusion that the Sentinel EPE and EPS
machines were reasonably priced. In fact, if petitioner had
conducted an independent investigation, his awareness of these
marketing principles should have led him to conclude that the
Sentinel recyclers were not reasonably priced.
The Sentinel EPE and EPS recyclers were not offered to the
general public and the traditional principles of supply and
demand pricing were therefore inapplicable. See Provizer v.
Commissioner, supra. The transactions were structured in a
manner such that, with the exception of a minimal down payment
for the machines, the majority of the purchase price was in the
form of a series of offsetting payments only realized through
bookkeeping entries. The purported price tags had nothing to do
with traditional principles of supply and demand pricing because
the Sentinel recyclers never were offered on the open market, and
there is no evidence that anyone ever intended that the recyclers
products would be so offered. See Gottsegen v. Commissioner,
Page: Previous 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 NextLast modified: May 25, 2011