- 61 -
Commissioner, 990 F.2d 893 (6th Cir. 1993).
Petitioners' reliance on Gainer v. Commissioner, supra;
McCrary v. Commissioner, 92 T.C. 827 (1989), and Todd v.
Commissioner, supra, is misplaced. In those cases, in contrast
to the consolidated cases herein, it was found that a valuation
overstatement did not contribute to an underpayment of taxes. In
the Todd and Gainer cases, the underpayments were due exclusively
to the fact that the property in each case had not been placed in
service. In the McCrary case, the underpayments were deemed to
result from a concession that the agreement at issue was a
license and not a lease. Although property was overvalued in
each of those cases, the overvaluations were not the ground on
which the taxpayers' liability was sustained. In contrast, "a
different situation exists where a valuation overstatement * * *
is an integral part of or is inseparable from the ground found
for disallowance of an item." McCrary v. Commissioner, supra at
859. Petitioners' consolidated cases present just such a
"different situation": overvaluation of the recyclers was
integral to and inseparable from petitioners' claimed tax
benefits and our holding that the Partnership transactions lacked
economic substance.13
13 To the extent that Heasley v. Commissioner, 902 F.2d 380
(5th Cir. 1990), revg. T.C. Memo. 1988-408, merely represents an
application of Todd v. Commissioner, 89 T.C. 912 (1987), affd.
862 F.2d 540 (5th Cir. 1988), we consider it distinguishable. To
the extent that the reversal in the Heasley case is based on a
concept that where an underpayment derives from the disallowance
Page: Previous 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 NextLast modified: May 25, 2011