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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 her
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 addition to tax until more
than 4 months after the trial of this case. We are reluctant to
find that respondent abused any discretion in this case when
respondent was not timely requested to exercise it and there is
no direct evidence of any abuse of administrative discretion.
Haught v. Commissioner, supra; cf. Wynn v. Commissioner, T.C.
Memo. 1995-609; Klieger v. Commissioner, T.C. Memo. 1992-734.
However, we do not decide this issue solely on petitioners'
failure timely to request a waiver but instead, we have
considered the issue on its merits. Petitioners urge that
petitioner relied on Bach in deciding on the valuation claimed on
their 1981 tax return. Petitioners contend that such reliance
was reasonable and, therefore, that respondent should have waived
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