John R. Hernandez - Page 3

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          Florida, tax collector for delinquent taxes owed on real property           
          are not obligations of a State or political subdivision, so that            
          interest paid on the certificates is not excluded from gross                
          income under section 103 for the taxable years 1990, 1991, and              
          1992.  On May 28, 1998, we granted petitioner's motion for                  
          reconsideration.                                                            
          Introduction                                                                
               On reconsideration, petitioner contends:2 (1) That tax                 
          certificates issued by the Pasco County, Florida, tax collector             
          include both ad valorem real property taxes and special                     
          assessments; (2) that section 1.103-1, Income Tax Regs., clearly            
          provides that certificates issued to enforce special assessments            
          against specific property, are, for the purposes of section 103,            
          obligations of the political subdivision; and (3) respondent’s              
          computation under Rule 155 has failed to deduct interest relating           
          to special assessments, from the composite interest payments,               
          which include interest on both special assessments and ad valorem           
          taxes, derived by the county as a single computation on the gross           
          charge against each parcel of land for which a tax certificate              
          was issued.                                                                 
               In his new arguments, petitioner relies on the following               
          language of section 1.103-1(b), Income Tax Regs.:                           


               2 Petitioner makes other claims that lack even facial merit            
          and do not warrant reconsideration.  Accordingly, they are                  
          denied.                                                                     




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