Charles A. and Marian L. Derby, et al. - Page 71




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               his liability after adjusting for any overvaluation.                   
               [Id. at 228.]                                                          
          The Court stated that "no * * * [overvaluation] penalty * * * [may          
          be imposed] when there is some other ground for disallowing the             
          entire portion of a deduction that otherwise might be disallowed            
          for overvaluation."  Id.; see also Scoville v. Commissioner, 108            
          F.3d 1386 (9th Cir. 1997), affg. in part and revg. in part without          
          published opinion T.C. Memo. 1995-376; Todd v. Commissioner, 862            
          F.2d 540, 543 (5th Cir. 1988), affg. 89 T.C. 912 (1987).                    
               We have denied petitioners' charitable contribution                    
          deductions, in their entirety, on the ground that petitioners               
          received a commensurate quid pro quo.  Therefore, under Gainer,             
          because there is a separate, independent ground for disallowing             
          those deductions, the overvaluation penalty may not be imposed              
          against petitioners.  See also 885 Inv. Co. v. Commissioner, 95             
          T.C. 156, 163 (1990).43                                                     
               C.  Conclusion                                                         
               Petitioners are not liable for either a 40-percent or 20-              
          percent addition to tax under section 6662.                                 








               43In light of our conclusion that the overvaluation penalty            
          may not be imposed, we need not address whether petitioners had             
          "reasonable cause" with the meaning of sec. 6664(c).                        





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