- 72 -
claimed tax benefits, in and of themselves, did not preclude
imposition of the section 6659 additions to tax. In McCrary v.
Commissioner, supra, the section 6659 addition to tax was
disallowed because the agreement at issue was conceded to be a
license and not a lease. In contrast, the records in
petitioners' cases plainly show that petitioners' underpayments
were attributable to overvaluation of the Sentinel EPE recyclers.
We hold that petitioners' reliance on McCrary v. Commissioner,
supra, is inappropriate.7
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 and 1982
was not in excess of $50,000. Given those concessions, and the
7 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 6, 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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