-6-
The partnership was one of 27 partnerships for which there was
a test case, Charlton v. Commissioner, T.C. Memo. 1990-402, affd.
990 F.2d 1161 (9th Cir. 1993). Like the partnership in which
petitioner was involved, the three partnerships at issue in
Charlton invested in the production of videotapes for use in
continuing medical education programs. In Charlton, we held that:
(1) The three partnerships lacked the requisite profit objective;
(2) the sales forecast and the values of the license, leases, and
tapes were grossly overstated; and (3) these were sham transactions
entered into primarily for their tax benefits. We therein upheld
the additions to tax for negligence and substantial understatement
of tax and imposed additional interest attributable to a tax-
motivated transaction.
Following Charlton, on January 25, 1993, the partnership’s tax
matters partner and the IRS entered into a stipulated decision in
which the tax matters partner agreed to the disallowance of all
deductions and investment tax credits. Thereafter, petitioners
were assessed $15,773 for 1982 and $10,805 for 1983; they concede
liability for those assessments. At issue herein are the resulting
additions to tax for negligence under section 6653(a)(1) and (2)
and the additions to tax for valuation overstatement under section
6659.2
2 Petitioners request that we consider whether they are
liable for additional interest under sec. 6621(c). Because the
(continued...)
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