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the correct value, the addition is equal to 30 percent of the
underpayment. Sec. 6659(b).
Petitioners claimed tax benefits, including an investment
tax credit and a business energy credit, based on purported
values of $1,162,666 for each Sentinel EPE recycler. Petitioners
concede that the fair market value of a Sentinel EPE recycler in
1981 was not in excess of $50,000. Therefore, if disallowance of
petitioners' claimed tax benefits is attributable to such
valuation overstatements, petitioners are liable for the section
6659 additions to tax at the rate of 30 percent of the
underpayments of tax attributable to the tax benefits claimed
with respect to the Partnerships.
Petitioners contend that section 6659 does not apply in
their cases for the following three reasons: (1) Disallowance of
the claimed tax benefits was attributable to other than a
valuation overstatement; (2) petitioners' concessions of the
claimed tax benefits preclude imposition of the section 6659
additions to tax; and (3) respondent erroneously failed to waive
the section 6659 additions to tax. We reject each of these
arguments for reasons set forth below.
1. The Grounds for Petitioners' Underpayments
Section 6659 does not apply to underpayments of tax that are
not "attributable to" valuation overstatements. See McCrary v.
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