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economic substance. Similarly, the records in these cases
plainly show that the overvaluation of the recyclers is integral
to and is the core of our holding that Masters was a sham and
lacked economic substance.
Petitioners’ reliance on McCrary v. Commissioner, supra, is
misplaced. In that case, the taxpayers conceded entitlement to
their claimed tax benefits, and the section 6659 addition to tax
was held inapplicable. However, the taxpayers’ concession of the
claimed tax benefits, in and of itself, did not preclude
imposition of the section 6659 addition to tax. In McCrary v.
Commissioner, supra, the section 6659 addition to tax was
disallowed because the agreement at issue was conceded to be a
license and not a lease. In contrast, the records in
petitioners’ cases plainly show that petitioners’ underpayments
were attributable to overvaluation of the recyclers.
Accordingly, petitioners’ reliance on McCrary v. Commissioner,
supra, is inappropriate.5
We held in Provizer v. Commissioner, supra, that each
recycler had a fair market value not in excess of $50,000. Our
5 Petitioners’ citation of Heasley v. Commissioner, supra, in
support of the concession argument is also inappropriate. The
Heasley case was not decided by the Court of Appeals for the
Fifth Circuit on the basis of a concession. Moreover, see supra
note 4 to the effect that the Court of Appeals for the Eighth
Circuit and this Court have not followed the Court of Appeals for
the Fifth Circuit’s rationale with respect to the application of
sec. 6659.
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