Stephen Kowalchuk - Page 2




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          interest due on a $3,987 deficiency for 1982.  The issues are                 
          whether petitioner is liable for these additions to tax.                      
          Petitioner resided in Boca Raton, Florida, at the time he filed               
          the petition in this case.                                                    
               The facts may be summarized as follows.                                  
          A.  Background                                                                
               This case is part of the Plastics Recycling group of cases.              
          For a detailed discussion of the transactions involved in the                 
          Plastics Recycling group of cases, see Provizer v. Commissioner,              
          T.C. Memo. 1992-177, affd. without published opinion 996 F.2d                 
          1216 (6th Cir. 1993).  It is stipulated that the underlying                   
          transactions involving the Sentinel Recyclers in the present case             
          are substantially identical to the transactions in Provizer v.                
          Commissioner, supra.  The facts concerning the transactions as                
          found in Provizer v. Commissioner, supra, are as follows.                     
               Packaging Industries Group, Inc. (PI), manufactured and sold             
          six Sentinel Recyclers to Ethynol Cogeneration, Inc. (ECI), for               
          $981,000 each.  ECI, in turn, resold the recyclers to F&G                     
          Equipment Corp. (F&G Corp.) for $1,162,666 each.  F&G Corp.                   
          leased the recyclers to the Clearwater Group partnership, which               
          then licensed the recyclers to First Massachusetts Equipment                  
          Corp. (FMEC), which sublicensed them back to PI.  PI allegedly                
          sublicensed the recyclers to entities (the end-users), which                  
          would use them to recycle plastic scrap.  The sublicense                      






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