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Petitioner claims that this payment is deductible as a business
bad debt mainly because EPC's articles of incorporation provided
that it would indemnify him for this payment and EPC failed to do
so. We disagree. Petitioner is not entitled to deduct any
portion of this amount. Even if we were to assume that EPC was
required to indemnify petitioner for this payment, an assumption
which we do not find as a fact, petitioner would be unable to
deduct this amount because he paid it in settlement of amounts
assessed against him under section 6672. Amounts paid for
section 6672 assessments are nondeductible. See sec. 162(f);
sec 1.162-21(b), Income Tax Regs; see also Arrigoni v.
Commissioner, 73 T.C. 792 (1980); Patton v. Commissioner, 71 T.C.
389 (1978); Smith v. Commissioner, 34 T.C. 1100 (1960), affd. per
curiam 294 F.2d 957 (5th Cir. 1961); Duncan v. Commissioner,
T.C. Memo. 1993-370, affd. 68 F.3d 315 (9th Cir. 1995).
Petitioner argues that the law is different because he had a
right of indemnification from EPC. We disagree. As the Court
stated in Arrigoni v. Commissioner, supra at 801 n.9, in
rejecting a similar claim:
even if a right to reimbursement exists, petitioners
would still fail on their claim. Sec. 162(f) makes the
addition to tax imposed by sec. 6672 nondeductible.
Patton v. Commissioner, 71 T.C. 389 (1978). Since the
addition to tax imposed by sec. 6672 is personal to the
taxpayer, petitioners cannot invoke sec. 166 to
circumvent the prohibition of a deduction under sec.
162(f). Cf. Smith v. Commissioner, 34 T.C. 1100
(1960), affd. per curiam 294 F.2d 957 (5th Cir. 1961).
The deductibility of the payments must be treated in a
manner consistent with the proper treatment of the
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