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III. The Case Herein (Manko II)
Respondent determined deficiencies in petitioners' Federal
income taxes, additions to tax, and additional interest as follows:
Additions to Tax and Additional Interest
Sec. Sec. Sec. Sec. Sec. Sec. Sec.
Year Deficiency 6653(a) 6653(a)(1) 6653(a)(2) 6653(b)(1) 6653(b)(2) 6661 6621(c)
1979 $2,676,752 $133,838 --- --- --- --- --- 2
1980 1,926,696 96,335 --- --- --- --- --- 2
1981 2,284,248 --- $114,212 1 --- --- --- 2
1982 1,794,143 --- 89,707 1 $897,072 1 $448,536 2
1983 1,649,568 --- 82,478 1 824,784 1 412,392 2
1 50 percent of the interest due on the deficiency.
2 120 percent of the interest due on the entire deficiency. Pursuant to the
Tax Reform Act of 1986, Pub. L. 99-514, sec. 1511(c)(1), 100 Stat. 2744, former
sec. 6621(d) was redesignated as sec. 6621(c).
For 1982 and 1983, the negligence additions to tax were imposed
with respect to the liability of Cynthia G. Manko, and the fraud
additions to tax were imposed with respect to the liability of
petitioner.1
All section references are to the Internal Revenue Code in
effect for the years under consideration, unless otherwise
indicated. All Rule references are to the Tax Court Rules of
Practice and Procedure.
The primary issue for decision is whether the settlement
agreement applicable to petitioner's Arbitrage Management gains and
losses in 1978 (Manko I) is likewise applicable to his Arbitrage
Management gains and losses for the years in issue, 1979 through
1 The notice of deficiency also made adjustments for
items unrelated to petitioner's interest in the partnerships,
including an adjustment for unreported interest income for 1980.
These unrelated issues have not been resolved.
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