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1981 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 additions to tax at the rate of 30 percent of the portions
of their underpayments attributable to such valuation
overstatements.
Petitioners contend that section 6659 does not apply in
their consolidated cases for the following three reasons: (1)
Disallowance of the claimed tax benefits was attributable to
other than a valuation overstatement; (2) petitioners' concession
of the claimed tax benefits precludes imposition of the section
6659 additions to tax; and (3) respondent erroneously failed to
waive the section 6659 additions to tax. We reject each of these
arguments for reasons set forth below.
1. The Grounds for Petitioners' Underpayments
Section 6659 does not apply to underpayments of tax that are
not "attributable to" valuation overstatements. See McCrary v.
Commissioner, 92 T.C. 827 (1989); Todd v. Commissioner, 89 T.C.
912 (1987), affd. 862 F.2d 540 (5th Cir. 1988). To the extent
taxpayers claim tax benefits that are disallowed on grounds
separate and independent from alleged valuation overstatements,
the resulting underpayments of tax are not regarded as
attributable to valuation overstatements. Krause v.
Commissioner, 99 T.C. at 178 (citing Todd v. Commissioner,
supra). However, when valuation is an integral factor in
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