10
results in a decrease in tax, it is treated as if it were an
overpayment for the taxable year with respect to which such
adjustment was made, the recovery of which is subject to the law
and regulations applicable to claims and suits for refund. Sec.
1314(b), sec. 1.1314(b)-1(a), Income Tax Regs.
Section 6621(c) provides for an increase in the interest
rate to 120 percent of the statutory rate on the underpayment of
tax if a substantial underpayment is due to a tax-motivated
transaction. Respondent asserts that we lack jurisdiction to
consider petitioners' liability for interest imposed at an
increased rate under section 6621(c).
In White v. Commissioner, 95 T.C. 209 (1990), the
Commissioner issued a notice of deficiency for additions to tax
and increased interest under section 6621(c) after the underlying
tax deficiency was assessed as a computational adjustment
resulting from partnership proceedings. The Court held that
increased interest under section 6621(c) is not treated as a
deficiency for purposes of section 6211 as provided by section
6601(e)(1), and thus the Court did not have jurisdiction to
redetermine additional interest in an affected item proceeding
under section 6230(a)(2)(A)(i). White v. Commissioner, supra at
212-214. The Court further held that section 6621(c)(4) did not
provide the Court with jurisdiction to redetermine the taxpayers'
liability for increased interest under section 6621(c). The
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011