Leon and Belle Atkind - Page 19

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            finding of lack of economic substance is "due in part" to a                                 
            valuation overstatement), affg. T.C. Memo. 1991-449; Gilman v.                              
            Commissioner, 933 F.2d 143, 151 (2d Cir. 1991), affg. T.C. Memo.                            
            1989-684; Masters v. Commissioner, T.C. Memo. 1994-197; Harness                             
            v. Commissioner, T.C. Memo. 1991-321.                                                       
                  In the Stipulation of Settled Issues, petitioners conceded                            
            that they "are not entitled to any deductions, losses, investment                           
            credits, business energy investment credits or any other tax                                
            benefits claimed on their tax returns as a result of their                                  
            participation in the Plastics Recycling Program".  In Todd v.                               
            Commissioner, supra, and McCrary v. Commissioner, supra,  we                                
            denied application of section 6659, even though the subject                                 
            property was overvalued, because the related deductions and                                 
            credits had been conceded or denied in their entirety on other                              
            grounds.  In Todd, we found that an underpayment was not                                    
            attributable to a valuation overstatement because property was                              
            not placed in service during the years in issue.  In McCrary, we                            
            found the taxpayers were not liable for the section 6659 addition                           
            to tax when, prior to the trial of the case, the taxpayers                                  
            conceded that they were not entitled to the investment tax credit                           
            because the agreement in question was a license and not a lease.                            
            In both cases, the underpayment was attributable to something                               
            other than a valuation overstatement.                                                       
                  This Court has held that concession of the investment tax                             
            credit in and of itself does not relieve taxpayers of liability                             
            for the section 6659 addition to tax.  Dybsand v. Commissioner,                             

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