- 46 -
from our finding of a lack of economic substance. Petitioners
conceded that the Scarborough and Plymouth transactions were
similar to the Clearwater transaction described in Provizer v.
Commissioner, supra, and that the Scarborough and Plymouth
transactions lacked economic substance. Given those concessions,
and the fact that the records here plainly show that the
overvaluation of the recyclers was the reason for the
disallowance of the tax benefits, and the fact that no argument
was made and no evidence was presented to the Court to prove that
disallowance and concession of the tax benefits related to
anything other than a valuation overstatement, we conclude that
the deficiencies caused by the disallowance of the claimed tax
benefits were attributable to the overvaluation of the Sentinel
EPE recyclers.
Finally, we consider petitioners' express arguments as to
waiver of the addition to tax under section 6659. On brief,
petitioners each contested imposition of the section 6659
addition to tax on the grounds that respondent erroneously failed
to waive the addition to tax. Section 6659(e) authorizes
respondent to waive all or part of the addition to tax for
valuation overstatement if taxpayers establish that there was a
reasonable basis for the adjusted bases or valuations claimed on
the returns and that such claims were made in good faith.
Respondent's refusal to waive a section 6659 addition to tax is
reviewable by this Court for abuse of discretion. Krause v.
Commissioner, 99 T.C. at 179.
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