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$1,162,667 each, but they did not, as we have found, have a value
exceeding $50,000 per machine.
Although petitioners declined to stipulate the value of the
Sentinel recyclers at issue, petitioners presented no probative
evidence by way of expert testimony or otherwise to contradict
the conclusions reached by respondent's experts. The record is
devoid of any evidence indicating that petitioners conducted a
meaningful investigation to value the Sentinel recyclers. We
have extensively considered the value of the Sentinel EPE
recycler and have concluded as an ultimate fact that the
recyclers did not have a fair market value in excess of $50,000.
See Provizer v. Commissioner, T.C. Memo. 1992-177. Having so
concluded, it follows that there was a valuation overstatement
under section 6659.
In view of the foregoing, we sustain respondent's
determination that petitioners are liable for the addition to tax
for valuation overstatement under section 6659.
Issue (4) Section 6621(c) Additional Interest
Respondent determined that petitioners are liable for
additional interest with respect to the underpayment attributable
to petitioners’ investment in Clearwater.
Section 6621(c), formerly section 6621(d), provides for an
increased rate of interest if the underpayment of tax exceeds
$1,000 and is attributable to a tax-motivated transaction as
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