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Year Deficiency
1978 $93,098
1979 84,284
1980 28,675
Respondent also determined that petitioners are liable for
increased interest pursuant to section 6621(c) (formerly section
6621(d))1 for the taxable years 1978, 1979, and 1980.
After concessions by the parties, the sole issue for
decision is whether Arlene Jacoby (petitioner) is entitled to
relief as an innocent spouse for the taxable years 1978, 1979,
and 1980. We hold that she is so entitled. Petitioner Gerald
Jacoby (Gerald) has reached a settlement with respondent
regarding his liabilities for all taxable years.
All section references are to the Internal Revenue Code in
effect for the years in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure, unless otherwise
indicated.
1 Sec. 6621(d) was redesignated as sec. 6621(c) by sec.
1511(c)(1)(A) of the Tax Reform Act of 1986, Pub. L. 99-514, 100
Stat. 2085, 2744, and repealed by sec. 7721(b) of the Omnibus
Budget Reconciliation Act of 1989 (OBRA 89), Pub. L. 101-239, 103
Stat. 2106, 2399, effective for tax returns due after Dec. 31,
1989, OBRA 89 sec. 7721(d), 103 Stat. 2400. The repeal does not
affect the instant case. For convenience, we 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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