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conceded is significant. 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 at 228; Irom v. Commissioner, 866 F.2d
545, 547 (2d Cir. 1989), vacating in part T.C. Memo. 1988-211;
Harness v. Commissioner, T.C. Memo. 1991-321.
In the present cases, no argument was made and no evidence
was presented 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,
petitioners each stipulated substantially the same facts
concerning the Partnership transactions as we found in Provizer
v. Commissioner, supra. In 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 2325 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.
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