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market value of a Sentinel EPE recycler in 1981 and up to the end
of 1982 was not in excess of $50,000. Given those concessions,
and the fact that the records here plainly show that the
overvaluations of the recyclers was the only reason for the
disallowance of the claimed tax benefits, we conclude that the
deficiencies were attributable to overvaluation of the Sentinel
EPE recyclers.
3. Section 6659(e)
Petitioners argue that respondent erroneously failed to
waive the section 6659 additions to tax. Section 6659(e)
authorizes respondent to waive all or part of the addition to tax
for valuation overstatement if taxpayers establish that there was
a reasonable basis for the adjusted bases or valuations claimed
on the returns and that such claims were made in good faith.
Respondent's refusal to waive a section 6659 addition to tax is
reviewable by this Court for abuse of discretion. Krause v.
Commissioner, 99 T.C. at 179. Abuse of discretion has been found
in situations where respondent's refusal to exercise such
discretion is arbitrary, capricious, or unreasonable. See
Mailman v. Commissioner, 91 T.C. 1079 (1988); Estate of Gardner
v. Commissioner, 82 T.C. 989 (1984); Haught v. Commissioner, T.C.
Memo. 1993-58.
We note initially that petitioners did not request
respondent to waive the section 6659 additions to tax until well
after the trials of these cases. Petitioners each made their
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