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January 31, 1995. The decision document reflected an agreement
by the parties: (1) The Court could enter the decision in
accordance with the stipulation of the parties submitted
therewith; (2) interest would be assessed as provided by law on
the deficiencies due from petitioner; and (3) effective upon the
entry of decision, petitioner waived the restrictions prohibiting
assessment and collection of the deficiencies, plus statutory
interest, until the decision of the Court became final. The
decision became final on September 3, 2002.
On September 9, 2002, respondent issued a notice to
petitioner reflecting an assessment of tax and interest of
$63,573 and $99,100.97, respectively, for the tax year ended
January 31, 1994. Respondent subsequently issued a second
notice, dated October 14, 2002, which included a tax due of
$162,673.97. This notice also included a penalty of $317.86.3
In calculating interest, respondent applied the normal interest
rate prescribed under section 6621(a)(2) for the period April 15,
1994, until December 5, 1998. This computation included
restricted interest on $225,753 for the period April 15, 1994,
until April 15, 1995, and normal interest on $63,573 from April
15, 1995, until December 5, 1998. On December 5, 1998,
respondent began applying the increased interest rate prescribed
3The evidence in the record reflects that the penalty was
based on the failure to timely pay the assessment amount.
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