- 71 -
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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