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the recyclers. Accordingly, petitioners’ reliance on McCrary v.
Commissioner, supra, is inappropriate.6
In Provizer v. Commissioner, T.C. Memo. 1992-177, we held
that each recycler had a fair market value not in excess of
$50,000. Our finding in Provizer that the recyclers had been
overvalued was integral to and inseparable from our holding of a
lack of economic substance. Petitioners stipulated that the
transaction in Hamilton was substantially similar to the
transaction described in Provizer, and that the fair market value
of the recyclers in 1982 was between $30,000 and $50,000. Given
these concessions, and that the overvaluation of the recyclers
was integral to and inseparable from the determination that
Hamilton lacked economic substance, we conclude that the
deficiencies were attributable to the overvaluation of the
recyclers.
For the foregoing reasons, we hold that petitioners are
liable for the section 6659 additions to tax for valuation
overstatement.
6 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 5 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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