- 65 -
supra, is inappropriate.14
We held in Provizer v. Commissioner, supra, that each
Sentinel EPE recycler had a fair market value not in excess of
$50,000. Our finding 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
the fair market value of a Sentinel EPE recycler in 1981 was not
in excess of $50,000. Given those concessions, and the fact that
the record here plainly shows that the overvaluations of the
recyclers was the only reason for the disallowance of the claimed
tax benefits, we conclude that the deficiencies were attributable
to overvaluation of the Sentinel EPE recyclers.
3. Section 6659(e)
Petitioners argue that respondent erroneously failed to
waive the section 6659 additions to tax. Section 6659(e)
authorizes the Commissioner to waive all or part of the addition
to tax for valuation overstatements if taxpayers establish that
there was a reasonable basis for the adjusted bases or valuations
14 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
13, to the effect that the Court of Appeals for the Second
Circuit and this Court have not followed the Heasley opinion with
respect to the application of sec. 6659.
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