- 55 -
Petitioners claimed tax benefits, including investment tax
credits and business energy credits, based on purported values of
$1,162,666 for each Sentinel EPE recycler. Petitioners concede
that the fair market value of a Sentinel EPE recycler in 1981 was
not in excess of $50,000. Therefore, if disallowance of
petitioners' claimed tax benefits is attributable to such
valuation overstatements, petitioners are liable for the section
6659 additions to tax at the rate of 30 percent of the
underpayments of tax attributable to the tax benefits claimed
with respect to the Partnerships.
Petitioners contend that section 6659 does not apply in
their cases for the following three reasons: (1) Disallowance of
the claimed tax benefits was attributable to other than a
valuation overstatement; (2) petitioners' concessions of the
claimed tax benefits preclude imposition of the section 6659
additions to tax; and (3) respondent erroneously failed to waive
the section 6659 additions to tax. We reject each of these
arguments for reasons set forth below.
1. The Grounds for Petitioners' Underpayments
Section 6659 does not apply to underpayments of tax that are
not "attributable to" valuation overstatements. See McCrary v.
Commissioner, 92 T.C. at 827; Todd v. Commissioner, 89 T.C. 912
(1987), affd. 862 F.2d 540 (5th Cir. 1988). To the extent
taxpayers claim tax benefits that are disallowed on grounds
Page: Previous 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 NextLast modified: May 25, 2011