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Petitioners' open-ended concessions do not obviate our
finding that the Partnership transactions lacked economic
substance due to overvaluation of the recyclers. This is not a
situation where we have "to decide difficult valuation questions
for no reason other than the application of penalties." See
McCrary v. Commissioner, supra at 854. The value of the Sentinel
EPE recycler was established in Provizer v. Commissioner, T.C.
Memo. 1992-177, and stipulated by the parties. As a 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' concessions, 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. Id. 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
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