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consequence of the inflated value assigned to the recyclers by
the Partnerships, petitioners claimed deductions and credits that
resulted in underpayments of tax, and we held that the
Partnership transactions lacked economic substance. Regardless
of petitioners' concession, in these cases the underpayments of
tax were attributable to the valuation overstatements.
Moreover, concession of the investment tax credit in and of
itself does not relieve taxpayers of liability for the section
6659 addition to tax. See Dybsand v. Commissioner, T.C. Memo.
1994-56; Chiechi v. Commissioner, T.C. Memo. 1993-630. Instead,
the ground upon which the investment tax credit is disallowed or
conceded is significant. Dybsand v. Commissioner, supra. 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 consolidated cases, no argument was made and
no evidence was presented to the Court that disallowance and
concession of the claimed investment tax credits and other tax
benefits related to anything other than a valuation
overstatement. To the contrary, petitioners stipulated
substantially the same facts concerning the Partnership
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