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of material fact, and factual inferences will be read in a manner
most favorable to the party opposing summary judgment. Dahlstrom
v. Commissioner, 85 T.C. 812, 821 (1985); Jacklin v.
Commissioner, 79 T.C. 340, 344 (1982).
1. Computation of the Additions to Tax Under Section 6661
Section 6661, originally added to the Code by section 323(a)
of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L.
97-248, 96 Stat. 324, 613, provides for an addition to tax if
there is a substantial understatement of tax liability for any
taxable year. Section 6661 was amended in the Omnibus Budget
Reconciliation Act of 1986 (OBRA), Pub. L. 99-509, sec. 8002(a),
100 Stat. 1874, 1951, by increasing the rate at which the
addition to tax is computed from 10 percent to 25 percent of the
amount of the underpayment.6 OBRA section 8002(b) provides that
the amendment to section 6661 is applicable to penalties assessed
after the date of enactment of the Act, i.e., October 21, 1986.
Considering the effective date of the amendment to section
6661, petitioner's assertion that a 10-percent rate should be
applied to compute the additions to tax is incorrect. The
additions to tax that respondent determined in the notice of
6 The Omnibus Budget Reconciliation Act of 1986, Pub. L.
99-509, sec. 8002(b), 100 Stat. 1951, included a repeal of an
amendment to sec. 6661 included in the Tax Reform Act of 1986,
Pub. L. 99-514, sec. 1504(a), 100 Stat. 2085, 2743, which amended
sec. 6661 to increase the rate on which the addition to tax is
computed from 10 percent of the underpayment to 20 percent of the
underpayment. See Pallottini v. Commissioner, 90 T.C. 498, 501-
503 (1988).
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