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it was raised for the first time in an amendment to answer,
respondent bears the burden of proof. Rule 142(a); Vecchio v.
Commissioner, 103 T.C. 170 (1994).
The annual rate of interest under section 6621(c) equals 120
percent of the interest payable under section 6601 with respect
to any substantial underpayment attributable to tax-motivated
transactions. An underpayment is substantial if it exceeds
$1,000. Sec. 6621(c)(2).
The term "tax motivated transaction" includes "any sham or
fraudulent transaction." Sec. 6621(c)(3)(A)(v). Transactions
devoid of economic substance are sham transactions for purposes
of section 6621(c)(3)(A)(v). Friendship Dairies, Inc. v.
Commissioner, 90 T.C. 1054, 1068 (1988); Cherin v. Commissioner,
89 T.C. 986, 1000 (1987). We have found that the Hyannis
transaction was a sham transaction lacking economic substance.
Therefore, by definition the Hyannis transaction is tax-motivated
under section 6621(c)(3)(A)(v). Moreover, the term "tax
motivated transaction" includes any section 6659(c) valuation
overstatement. Sec. 6621(c)(3)(A)(i). In 1981, petitioners
claimed a value for the recyclers in excess of 150 percent of the
true value of the recyclers. Therefore, petitioners had a
valuation overstatement as defined in section 6659(c).
For section 6621(c) interest to apply, the underpayment of
taxes must be "attributable to" a tax-motivated transaction.
Where a valuation overstatement or other category of tax-
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