- 32 -
underpayments of tax were attributable to the valuation
overstatements.
Moreover, concession of the investment tax credit in and of
itself does not relieve taxpayers of liability for the section
6659 addition to tax. See Singer v. Commissioner, supra; Kaliban
v. Commissioner, supra; Sann v. Commissioner, supra; Dybsand v.
Commissioner, T.C. Memo. 1994-56; Chiechi v. Commissioner, T.C.
Memo. 1993-630. Instead, the ground upon which the investment
tax credit is disallowed or conceded is significant. See Dybsand
v. Commissioner, supra. Even in situations in which there are
arguably two grounds to support a deficiency and one supports a
section 6659 addition to tax and the other does not, the taxpayer
may still be liable for the addition to tax. See Gainer v.
Commissioner, 893 F.2d 225 (9th Cir. 1990); Irom v. Commissioner,
866 F.2d 545, 547 (2d Cir. 1989), vacating in part T.C. Memo.
1988-211; Harness v. Commissioner, T.C. Memo. 1991-321.
In these cases, petitioners each stipulated substantially
the same facts concerning the Masters transaction as we found in
Provizer v. Commissioner, supra. In Provizer, we held that the
taxpayers were liable for the section 6659 addition to tax
because the underpayment of taxes was directly related to the
overvaluation of the recyclers. The overvaluation of the
recyclers, exceeding 2325 percent, was an integral part of our
findings in Provizer that the transaction was a sham and lacked
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