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See, e.g., Thornsjo v. Commissioner, T.C. Memo. 2001-129; West v.
Commissioner, T.C. Memo. 2000-389; Barber v. Commissioner, T.C.
Memo. 2000-372; Barlow v. Commissioner, T.C. Memo. 2000-339;
Ulanoff v. Commissioner, T.C. Memo. 1999-170; Merino v.
Commissioner, T.C. Memo. 1997-385, affd. 196 F.3d 147 (3d Cir.
1999); Gottsegen v. Commissioner, T.C. Memo. 1997-314. In all
but two of these cases, we found the taxpayers liable for the
additions to tax for negligence.17 In all of these cases in
which the issue was presented, we found the taxpayers liable for
additions to tax for overvaluation.
In Provizer v. Commissioner, T.C. Memo. 1992-177, the test
case for the Plastics Recycling cases, we (1) found that each
recycler had a fair market value of not more than $50,000; (2)
held that the transaction, which is virtually identical to the
transaction in the present case, was a sham 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
17In Dyckman v. Commissioner, T.C. Memo. 1999-79, and
Zidanich v. Commissioner, T.C. Memo. 1995-382, we held that 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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