- 3 - an underpayment that takes into account all deductible expenses, including expenses for trustee's fees, attorney's fees, and deficiency interest that were incurred after the filing of the estate tax return. Respondent challenges the estate's ability to compute its underpayment by deducting the latter expenses. Respondent asserts that the estate must compute its underpayment based solely on the expenses which were reported on its estate tax return. We agree with petitioner. Section 6663(a) imposes a 75-percent penalty on the portion of "any underpayment of tax required to be shown on a return [that] is due to fraud".1 The term "underpayment" is defined by section 6664(a) to mean the amount by which any tax imposed by this title exceeds the excess of-- (1) the sum of-- (A) the amount shown as the tax by the taxpayer on his return, plus (B) amounts not so shown previously assessed (or collected without assessment), over (2) the amount of rebates made. 1 Sec. 6663(a) provides: SEC. 6663(a). Imposition of Penalty.--If any part of any underpayment of tax required to be shown on a return is due to fraud, there shall be added to the tax an amount equal to 75-percent on the portion of the underpayment which is attributable to fraud.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011