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T.C. Memo. 1994-56; Chiechi v. Commissioner, T.C. Memo. 1993-630.
Instead, what is significant is the ground upon which the
investment tax credit is disallowed or conceded. Chiechi v.
Commissioner, supra. Even in situations in which there are
arguably two grounds to support a deficiency and one supports a
section 6659 addition to tax and the other does not, the taxpayer
may still be liable for the addition to tax. Gainer v.
Commissioner, 893 F.2d 225, 228 (9th Cir. 1990), affg. T.C. Memo.
1988-416; Irom v. Commissioner, 866 F.2d 545, 547 (2d Cir. 1989),
vacating in part and remanding T.C. Memo. 1988-211; Harness v.
Commissioner, supra.
In petitioner's case, there was no argument made and no
evidence presented showing that disallowance and concession of
the claimed tax benefits, including the investment tax credits,
related to anything other than a valuation overstatement. To the
contrary, petitioners stipulated substantially the same facts
concerning the underlying transactions as we found in Provizer v.
Commissioner, supra. In the Provizer case, we held that the
taxpayers were liable for the section 6659 addition to tax
because the underpayment of taxes was directly related to the
overvaluation of the Sentinel EPE recyclers. The overvaluation
of the recyclers, exceeding 2325 percent, was an integral part of
our findings in Provizer that the transaction was a sham and
lacked economic substance. Similarly, the record in this case
plainly shows that the overvaluation of the recyclers was
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