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Respondent determined a deficiency in estate tax.
Petitioner filed a petition to contest that determination. The
parties have settled all issues in this case (except those in the
motion before us). Petitioner had no deficiency or overpayment.
Petitioner owed $98,707.93 of the tax shown on the return plus
interest of $292,878.72 when petitioner filed this motion.
Discussion
A. Background
1. Sections 6161 and 6166
A taxpayer generally may deduct interest on unpaid Federal
and State estate taxes from the gross estate as an expense of
administration. Sec. 2053(a). Interest may accrue on unpaid
estate taxes because the estate has an extension of time to pay
tax under section 6166 or section 6161(a). An executor may elect
to pay estate tax in 10 equal installments, starting at the end
of a 5-year period during which only interest is payable, if a
closely held business constitutes more than 35 percent of the
adjusted gross estate. Sec. 6166(a)(1). Petitioner did not make
an election under section 6166. The Secretary may extend the
time in which a taxpayer is required to pay estate tax (up to 12
months) if there is reasonable cause under section 6161(a)(1) and
the accompanying regulations.1 Under section 6161(a)(2), the
1Sec. 6161(a) provides:
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