- 43 -
Commissioner, 99 T.C. at 178 (citing Todd v. Commissioner,
supra). However, when valuation is an integral factor in
disallowing deductions and credits, section 6659 is applicable.
See Zfass v. Commissioner, F.3d (4th Cir. June 23, 1997),
affg. T.C. Memo. 1996-167; Illes v. Commissioner, 982 F.2d 163,
167 (6th Cir. 1992), affg. T.C. Memo. 1991-449; Gilman v.
Commissioner, 933 F.2d 143, 151 (2d Cir. 1991) (the section 6659
addition to tax applies if a finding of lack of economic
substance is "due in part" to a valuation overstatement), affg.
T.C. Memo. 1989-684; Masters v. Commissioner, T.C. Memo. 1994-
197, affd. without published opinion 70 F.3d 1262 (4th Cir.
1995); Harness v. Commissioner, T.C. Memo. 1991-321.
Petitioners argue that the disallowance of the claimed
investment tax and business energy credits was not "attributable
to" a valuation overstatement. According to petitioners, the
credits were disallowed because the Plymouth transaction lacked
economic substance, not because of any valuation overstatement.
It follows, petitioners reason, that because the "attributable
to" language of section 6659 requires a direct causative
relationship between a valuation overstatement and an
underpayment in tax, section 6659 cannot apply to their
deficiency. Petitioners cite the following cases to support this
argument: Heasley v. Commissioner, 902 F.2d 380 (5th Cir. 1990),
revg. T.C. Memo. 1988-408; Gainer v. Commissioner, 893 F.2d 225
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