Leon and Belle Atkind - Page 20

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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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