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Respondent contends that the addition to tax under section 6661
should be imposed because there was no substantial authority
supporting the claimed treatment of the disallowed items.
Petitioners argue that they should be held not liable for the
section 6661 addition to tax and that respondent should have waived
the section 6661 addition to tax.
Respondent also argues that petitioners never formally
requested respondent to waive the section 6661 addition to tax, and
respondent argues that the Court therefore is without jurisdiction
to review respondent's refusal to waive this addition to tax.
On the record in these cases, we conclude that the section
6661 addition to tax has always been before the Court and in
dispute between the parties. Respondent has been aware for years
of petitioners’ request for an abatement thereof.
In the related test case of Krause v. Commissioner, 99 T.C. at
179 (on general grounds that are also applicable to petitioners
herein), we expressly addressed and rejected respondent's
imposition of the section 6661 addition to tax. Based on the
record in these cases, we conclude that respondent's refusal to
waive the section 6661 addition to tax constitutes an abuse of
discretion. Mailman v. Commissioner, 91 T.C. 1079 (1988); see also
Vorsheck v. Commissioner, 933 F.2d 757 (9th Cir. 1991).
As we explained in Krause v. Commissioner, 99 T.C. at 180,
imposition of increased interest under section 6621(c), and its
predecessor section 6621(d), is more automatic. Section 6621(c)
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