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Additions to Tax
Year Deficiency Sec. 6653(b)(1)1 Sec. 6661
1985 $ 58,899 $ 73,4072 $14,725
1986 82,667 103,0293 20,667
1987 104,190 118,5594 25,848
This matter is before the Court on the respondent's Motion for
Summary Judgment. Unless otherwise indicated, all section
references are to the Internal Revenue Code in effect for the
1 Sec. 6653(b) above refers to both sec. 6653(b)(1) and
(b)(2), which was in effect in 1985, and to sec. 6653(b)(1)(A)
and (b)(1)(B), which was in effect in 1986 and 1987.
Sec. 6653(b)(1) provided:
If any part of any underpayment (as defined in
subsection (c)) of tax required to be shown on a return
is due to fraud, there shall be added to the tax an
amount equal to 50 percent of the underpayment.
Sec. 6653(b)(1)(A) provided:
If any part of any underpayment (as defined in
subsection (c)) of tax required to be shown on a return
is due to fraud, there shall be added to the tax an
amount equal to the sum of * * * (A) 75 percent of the
portion of the underpayment which is attributable to
fraud * * * .
Both provisions require that 50 percent of the interest payable
under sec. 6601 is due with respect to that portion of the
understatement attributable to fraud. Secs. 6653(b)(2)(A),
6653(b)(2).
2 Plus 50 percent of the interest due on $58,899
3 Plus 50 percent of the interest due on $82,667.
4 Plus 50 percent of the interest due on $103,392.
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Last modified: May 25, 2011