- 38 -
related deductions and credits had been conceded or denied in
their entirety on other grounds. In Todd, we found that an
underpayment was not attributable to a valuation overstatement
because property was not placed in service during the years in
issue. In McCrary, we found the taxpayers were not liable for
the section 6659 addition to tax when, prior to the trial of the
case, the taxpayers conceded that they were not entitled to the
investment tax credit because the agreement in question was a
license and not a lease. In both cases, the underpayment was
attributable to something other than a valuation overstatement.
This Court has held that concession of the investment tax
credit in and of itself does not relieve taxpayers of liability
for the section 6659 addition to tax. 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. Chiechi 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
225, 228 (9th Cir. 1990), affg. T.C. Memo. 1988-416; Irom v.
Commissioner, 866 F.2d 545, 547 (2d Cir. 1989), vacating in part
and remanding T.C. Memo. 1988-211; Harness v. Commissioner,
supra.
Page: Previous 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 NextLast modified: May 25, 2011