Robert Gottsegen - Page 27

                                       - 27 -                                         
               B.   Substantial Valuation Misstatement                                
               In the notice of deficiency for 1989, respondent determined            
          that the accuracy-related penalty should be imposed based on                
          either a substantial valuation misstatement or a substantial                
          understatement of income tax or negligence. We begin with                   
          whether there was a substantial valuation misstatement for 1989.            
               As relevant herein, section 6662(e) provides that there is a           
          substantial valuation misstatement if the value or adjusted basis           
          of any property claimed on a return is 200 percent or more of the           
          amount determined to be the correct amount.  Sec. 6662(e)(1)(A).            
          Also, as relevant herein, section 6662(e) does not apply unless             
          the portion of the underpayment attributable to the substantial             
          valuation misstatement exceeds $5,000.  Sec. 6662(e)(2).                    
               Respondent contends that the adjusted basis of the Sentinel            
          EPE and EPS recyclers claimed by petitioner on his 1989 return              
          exceeds by at least 200 percent, the fair market value of the               
          recyclers.  Petitioner bears the burden of proving that                     
          respondent's determination is erroneous.  Rule 142(a); Bixby v.             
          Commissioner, 58 T.C. 757, 791-792 (1972).                                  
               1.   The Sentinel EPE Recycler                                         
               In order to establish the market value of the Sentinel EPE             
          recycler, respondent presented the testimony and expert witness             
          reports of Grossman and Lindstrom.  Opinions of experts are not             
          binding on this Court and may be rejected entirely if contrary to           






Page:  Previous  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  33  34  35  36  Next

Last modified: May 25, 2011