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attributable to" a valuation overstatement. Sec. 6659(a), (d).
A valuation overstatement exists if the fair market value (or
adjusted basis) of property claimed on a return equals or exceeds
150 percent of the amount determined to be the correct amount.
Sec. 6659(c). If the claimed valuation exceeds 250 percent of
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 and 1982 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 addition to tax at the rate of 30 percent of the
underpayment 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 reasons: (1) Disallowance of the
claimed tax benefits was attributable to other than a valuation
overstatement; (2) petitioners' concessions of the claimed tax
benefits precludes imposition of the section 6659 additions to
tax; and (3) respondent erroneously failed to waive the section
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