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the Provizer case, 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. The overvaluation of the recyclers, exceeding 2,325
percent, was an integral part of our findings in Provizer that
the transaction was a sham and lacked economic substance.
Similarly, the records in these cases plainly show that the
overvaluation of the recyclers is integral to and is the core of
our holding that the underlying transactions here were shams and
lacked economic substance.
Petitioners' reliance on McCrary v. Commissioner, supra, is
misplaced. In that case, the taxpayers conceded disentitlement
to their claimed tax benefits, and the section 6659 addition to
tax was held inapplicable. However, the taxpayers' concession of
the claimed tax benefits, in and of itself, did not preclude
imposition of the section 6659 addition to tax. In McCrary v.
Commissioner, supra, the section 6659 addition to tax was
disallowed because the agreement at issue was conceded to be a
license and not a lease. In contrast, the records in
petitioners' cases plainly show that petitioners' underpayments
were attributable to overvaluation of the Sentinel EPE recyclers.
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