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valuation overstatement was integral to a finding that the
investment program lacked economic substance. Thus, we hold
that petitioners are liable for the addition to tax for valuation
overstatement.
4. Whether Petitioners Are Liable for Increased Interest
Respondent determined that petitioners are liable for
increased interest under section 6621(c) on substantial
underpayments attributable to tax-motivated transactions for the
years in issue. Petitioners contend that they were motivated by
profit and not tax reasons when they invested in Century.
Section 6621(c) (formerly section 6621(d)) provides for an
increase in the interest rate where there is a "substantial
underpayment" (an underpayment exceeding $1,000) in any taxable
year "attributable to 1 or more tax motivated transactions."
Section 6621(c)(3) defines certain transactions as tax motivated.
The increased rate of interest applies to interest which accrues
after December 31, 1984 (the date of enactment of section
6621(d)), even though the tax-motivated transaction was entered
into before that date and "regardless of the date the return was
filed." H. Conf. Rept. 98-861 (1984), 1984-3 C.B. (Vol. 2) 1,
239; Solowiejczyk v. Commissioner, 85 T.C. 552, 556 (1985), affd.
without published opinion 795 F.2d 1005 (2d Cir. 1986).
A valuation overstatement under section 6659 is a "tax-
motivated transaction." Sec. 6621(c)(3)(A)(i). We have held
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