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under section 6653(a)(1) and (2) for the years in issue.
Respondent is sustained on this issue.
Issue (4) Section 6659 Valuation Overstatement
Petitioner also contests the addition to tax for valuation
overstatement under section 6659 for the years in issue.
A value claimed on a return that exceeds the correct value
by 150 percent or more constitutes a valuation overstatement.
See sec. 6659(c). With respect to the Plymouth investment, we
have found that Sentinel EPE recyclers valued at $1,162,667 each
did not have a value exceeding $50,000 per machine. With respect
to the Taylor investment, we have found that Sentinel EPS
recyclers valued at $1,750,000 each did not have a value
exceeding $50,000 per machine.
Although petitioner declined to stipulate the value of the
Sentinel recyclers at issue, petitioner presented no evidence by
way of expert testimony to contradict the conclusions reached by
respondent's experts. The record is devoid of any evidence
indicating that petitioner conducted a meaningful investigation
to value the Sentinel recyclers. We have extensively considered
the value of the Sentinel EPE recycler and the value of the
Sentinel EPS recycler and have concluded as an ultimate fact that
the Sentinel EPE and EPS recyclers did not have a fair market
value at that time in excess of $50,000 each. See also Gottsegen
v. Commissioner, T.C. Memo. 1997-314; Provizer v. Commissioner,
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