Albert R. and Phyllis F. Dworkin - Page 3

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                  On February 22, 1994, the parties filed a Stipulation of                                 
            Settled Issues with respect to petitioners' 1981 Federal income                                
            tax return.  The parties stipulated that petitioners are not                                   
            entitled to any deductions, losses, investment tax credits,                                    
            business energy credits, or any other tax benefits claimed on                                  
            their tax returns as a result of their participation in the                                    
            "Plastics Recycling Program".  The parties further stipulated                                  
            that the underpayments in income tax attributable to petitioners'                              
            participation in the "Plastics Recycling Program" are substantial                              
            underpayments attributable to tax motivated transactions, subject                              
            to the increased rate of interest established under section                                    
            6621(c).                                                                                       
                  On March 21, 1994, the parties filed a Partial Stipulation                               
            of Settlement regarding interest income.  The parties stipulated                               
            that interest income from accounts with the Irving Trust Co. in                                
            the amount of $1,271, and interest income from Emigrant Savings                                
            Bank account number 2-5054650-4, in the amount of $2,000 is                                    
            includable in petitioners' taxable income for tax year 1981.  The                              
            parties also stipulated that interest income from Emigrant                                     
            Savings Bank account number 2-5054650-4, in the amount of $2,000                               


            2(...continued)                                                                                
            case.  For simplicity, we will refer to this section as sec.                                   
            6621(c).  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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