- 3 -
by section 6621(c) applicable to large corporate underpayments of
tax.
Background
On August 17, 1995, respondent issued notices of deficiency
to Pen Coal Corp. (Pen Coal) in which respondent determined the
following deficiencies in, additions to, and accuracy-related
penalty in respect of Pen Coal's Federal withholding taxes under
chapter 3 of subtitle A:
Additions to Tax and Penalty
Sec. Sec. Sec. Sec.
Year Deficiency 6651(a)(1) 6653(a) 6661 6662
1986 $1,694,871 $423,718 $90,425 -- --
1987 3,125,107 -- -- $781,277 --
1988 1,638,186 -- -- 409,547 --
1989 1,600,390 -- -- -- $320,078
Respondent also determined that Pen Coal's underpayments for the
taxable years 1986 through 1989 constitute large corporate
underpayments within the meaning of section 6621(c)(3) and that
Pen Coal is therefore liable for interest computed at the
increased rate prescribed in section 6621(c)(1).2 The notices of
2Sec. 6621(c), which was enacted in its present form by sec.
11341(a) of the Omnibus Budget Reconciliation Act of 1990, Pub.
L. 101-508, 104 Stat. 1388-470, effective for purposes of
determining interest for periods after Dec. 31, 1990, sets forth
the rules for determining the amount of interest payable under
sec. 6601 on large corporate underpayments of tax. Sec. 6621(c)
provides in pertinent part:
(continued...)
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011