Albert R. and Phyllis F. Dworkin - Page 23

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                  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,                                
            T.C. Memo. 1994-56.  Instead, what is significant is the ground                                
            upon which the investment tax credit is disallowed or conceded.                                

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