- 53 -
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.
Concession of the investment tax credit in and of itself
does not relieve a taxpayer of liability for the section 6659
addition to tax. See Dybsand v. Commissioner, T.C. Memo. 1994-
56; Chiechi v. Commissioner, T.C. Memo. 1993-630. Instead, the
ground upon which the investment tax credit is disallowed or
conceded is significant. 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.
Snyder made no argument and presented no evidence to the
Court to prove that disallowance and concession of the investment
tax credits related to anything other than a valuation
overstatement. To the contrary, Snyder stipulated substantially
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