- 28 -
motivated transaction is an integral part of, or inseparable
from, the ground for disallowance of an item, section 6621(c)
increased interest applies. See McCrary v. Commissioner, 92 T.C.
at 859. Petitioners stipulated substantially the same facts
regarding the underlying transaction in these cases as we found
in Provizer v. Commissioner, T.C. Memo. 1992-177, where 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. In the present
cases we have likewise found that overvaluation of the recyclers
was an integral part of the ground for disallowance of the items
related to Hyannis. Accordingly, respondent's determination as
to the applicable interest rate for deficiencies attributable to
tax-motivated transactions is sustained, and the increased rate
of interest applies for the taxable year in issue.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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