- 67 -
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 additions to
tax were held inapplicable. However, the concessions of the
claimed tax benefits, in and of themselves, did not preclude
imposition of the section 6659 additions 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.
We hold that petitioners' reliance on McCrary v. Commissioner,
supra, is inappropriate.6
We held in Provizer v. Commissioner, supra, that each
Sentinel EPE recycler had a fair market value not in excess of
$50,000. Our holding in the Provizer case that the Sentinel EPE
recyclers had been overvalued was integral to and inseparable
from our holding of a lack of economic substance. Petitioners
stipulated that the Partnership transactions were similar to the
Clearwater transaction described in the Provizer case, and that
6 Petitioners' citation of Heasley v. Commissioner, supra, in
support of the concession argument is also inappropriate. That
case was not decided by the Court of Appeals for the Fifth
Circuit on the basis of a concession. Moreover, see supra note 5
to the effect that this Court, the Court of Appeals for the
Second Circuit, and other Courts have not followed the Heasley
opinion with respect to the application of sec. 6659.
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