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overstatement, in the amount of $1,378.75 under section
6653(a)(1) for negligence, and under section 6653(a)(2) in the
amount of 50 percent of the interest payable with respect to the
portion of the underpayment attributable to negligence.
Respondent also determined that interest on the deficiency
accruing after December 31, 1984, would be calculated at 120
percent of the statutory rate under section 6621(c). In a
stipulation of settled issues filed August 8, 1990, petitioners
Alter conceded the disallowance of a real estate office rent
deduction claimed on their 1981 return in the amount of $3,320.
The parties in each of these consolidated cases filed
Stipulations of Settled Issues concerning the adjustments
relating to petitioners' participation in the Plastics Recycling
Program. The stipulations provide:
1. Petitioners are not entitled to any deductions,
losses, investment credits, business energy investment
credits or any other tax benefits claimed on their tax
returns as a result of their participation in the
Plastics Recycling Program.
2. 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 I.R.C. �6621(c),
formerly �6621(d).
3. This stipulation resolves all issues that relate to
the items claimed on petitioners' tax returns resulting
from their participation in the Plastics Recycling
Program, with the exception of petitioners' potential
liability for additions to the tax for valuation
overstatements under I.R.C. �6659 and for negligence
under the applicable provisions of �6653(a).
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