$3,000 to $5,000. Accordingly, without further analysis, we find
that petitioner is liable for the addition to tax due to a
valuation overstatement under section 6659. Respondent is
sustained on this issue.
Issue 7. Increased Interest
Section 6621(c) provides for an interest rate of 120 percent
of the statutory rate where there is an underpayment of taxes in
excess of $1,000 attributable to one or more enumerated “tax
motivated transactions” in any year. The increased interest rate
applies to interest accrued after December 31, 1984, even though
the transaction was entered into prior to that date.
Solowiejczyk v. Commissioner, 85 T.C. 552 (1985), affd. without
published opinion 795 F.2d 1005 (2d Cir. 1986).
Tax-motivated transactions include valuation overstatements
within the meaning of section 6659(c). Sec. 6621(c)(3)(A)(i).
As we have determined that petitioner is liable for the addition
to tax due to a valuation overstatement, we sustain respondent on
this issue. Accordingly, we find that petitioner is liable for
the increased rate of interest under section 6621(c).
Issue 8. Penalty Under Section 6673
Respondent filed a motion in the instant case for a penalty
against petitioner under section 6673. Whenever it appears that
proceedings before this Court have been instituted or maintained
by the taxpayer primarily for delay, or the taxpayer’s position
in such proceedings is frivolous or groundless, or the taxpayer
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