- 15 -
assessed by respondent. Section 6621(c), formerly section
6621(d)--as in effect for taxable years for which returns were
due prior to 1990, for interest accruing after 1984--provides an
increased rate of interest for substantial underpayments
attributable to tax-motivated transactions. This Court generally
lacks jurisdiction to redetermine interest prior to an entry of a
decision redetermining a deficiency. See sec. 7481(c) (as
currently in effect); Rule 261; Pen Coal Corp. v. Commissioner,
107 T.C. 249, 255 (1996). Furthermore, this Court generally does
not have jurisdiction to review respondent’s assessment of
section 6621(c) tax-motivated interest in affected item
proceedings, such as in the present case, even though the tax-
motivated interest is an affected item which requires a partner
level determination. See White v. Commissioner, 95 T.C. 209
(1990); Greene v. Commissioner, T.C. Memo. 1995-105. A narrow
exception to this rule applies if a taxpayer has paid the
assessed tax-motivated interest and subsequently invokes the
overpayment jurisdiction of this Court under section 6512(b).
See Barton v. Commissioner, 97 T.C. 548 (1991).
Petitioners nevertheless argue that this Court has
jurisdiction to review such assessments under section 6621(c)(4).
Section 6621(c)(4) provides as follows:
(4) Jurisdiction of Tax Court.--In the case of any
proceeding in the Tax Court for a redetermination of a
deficiency, the Tax Court shall also have jurisdiction to
determine the portion (if any) of such deficiency which is a
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011