- 10 - because it lacked economic substance and a business purpose; (3) sustained the additions to tax for negligence under section 6653(a)(1) and (2); (4) sustained the addition to tax for valuation overstatement under section 6659 because the underpayment of taxes was directly related to the overvaluation of the recyclers; and (5) held that the partnership losses and tax credits claimed with respect to the plastics recycling partnership at issue were attributable to tax-motivated transactions within the meaning of section 6621(c). We also found that other recyclers were commercially available during the year in issue. In reaching the conclusion that the transaction lacked a business purpose, this Court relied heavily upon the overvaluation of the recyclers. Id. Neither petitioners nor respondent had a copy of the offering memorandum for Whitman available at the time of trial, nearly 20 years after petitioners’ investment. In Barber v. Commissioner, supra, where the taxpayers, like petitioners, were limited partners in Whitman, we explained: In a 4-step series of simultaneous transactions closely resembling those described in the Provizer case and stipulated by the parties herein, Packaging Industries of Hyannis, Massachusetts (PI) manufacturedPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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