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income taxes accruing after December 31, 1984, would be
calculated at 120 percent of the statutory rate under section
6621(c).2 In addition to the above deficiencies and additions to
tax, in an amended answer, respondent asserted additions to tax
for 1981 in the amount of $689 under section 6653(a)(1) for
negligence and under section 6653(a)(2) in an amount equal to 50
percent of the interest due on the underpayment attributable to
negligence.
The issues for decision are: (1) Whether petitioner is
entitled to deductions claimed on his 1982 Federal income tax
return with respect to his interest in the partnership Efron
Investors II and whether petitioner is liable for increased
interest under section 6621(c) with respect to 1982; (2) whether
expert reports and testimony offered by respondent are admissible
into evidence; (3) whether petitioner is entitled to claimed
deductions and tax credits with respect to Clearwater as passed
through EI to petitioner; (4) whether petitioner is liable for
additions to tax under section 6653(a)(1) and (2) for 1981; (5)
whether petitioner is liable for the addition to tax under
2
This section was repealed by sec. 7721(b) of the Omnibus
Budget Reconciliation Act of 1989 (OBRA 89), Pub. L. 101-239, 103
Stat. 2106, 2399, effective for tax returns due after Dec. 31,
1989, OBRA 89, sec. 7721(d), 103 Stat. 2400. The repeal does not
affect the instant case. The annual rate of interest under sec.
6621(c) for interest accruing after Dec. 31, 1984, equals 120
percent of the interest payable under sec. 6601 with respect to
any substantial underpayment attributable to tax-motivated
transactions.
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