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issue, unless otherwise indicated. All Rule references are to
the Tax Court Rules of Practice and Procedure. The Court agrees
with and adopts the opinion of the Special Trial Judge, which is
set forth below.
OPINION OF THE SPECIAL TRIAL JUDGE
WOLFE, Special Trial Judge: Respondent determined a
deficiency in petitioners' 1981 joint Federal income tax in the
amount of $27,751, plus additions to tax for that year in the
amount of $8,325.30 under section 6659 for valuation
overstatement, in the amount of $1,387.55 under section
6653(a)(1) for negligence, and under section 6653(a)(2) in an
amount equal to 50 percent of the interest due on the
underpayment attributable to negligence.1 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, the parties agreed to a
reduced deficiency in the amount of $26,749, plus reduced
additions to tax in the amount of $6,475 under section 6659 for
valuation overstatement and in the amount of $1,337 under section
6653(a)(1) for negligence. The parties also agreed that the
underpayment of $26,749 is a substantial underpayment
1 In the notice of deficiency, respondent refers to sec.
6653(a)(1)(A) and (B). For 1981, the additions to tax for
negligence were provided under sec. 6653(a)(1) and (2).
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