Malcolm I. Lewin and Trina Lewin - Page 19

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          Kaliban v. Commissioner, T.C. Memo. 1997-271; Sann v.                       
          Commissioner, T.C. Memo. 1997-259 n.13 (and cases cited therein),           
          affd. sub nom. Addington v. Commissioner, 205 F.3d 54 (2d Cir.              
          2000).  Although we have considered each case on its own                    
          particular facts and circumstances, in all but two of the                   
          Plastics Recycling cases5 we found the taxpayers liable for the             
          additions to tax for negligence.                                            
               In Provizer v. Commissioner, T.C. Memo. 1992-177, the test             
          case for the group of cases, we resolved the Plastics Recycling             
          issues as follows:  (1) We found that each recycler had a fair              
          market value of not more than $50,000; (2) we held that the                 
          transaction, which was virtually identical to the transaction in            
          the present case, was a sham because it lacked economic substance           
          and a business purpose; (3) we sustained the additions to tax for           
          negligence under section 6653(a)(1) and (2); (4) we sustained the           
          addition to tax for valuation overstatement under section 6659              
          because the underpayment of taxes related directly to the                   
          overvaluation of the recyclers; and (5) we 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           

               5  In Dyckman v. Commissioner, T.C. Memo. 1999-79, and                 
          Zidanich v. Commissioner, T.C. Memo. 1995-382, we held the                  
          taxpayers were not negligent with respect to their participation            
          in the Plastics Recycling program.  Both cases involved unusual             
          circumstances not present in this case.                                     

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