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agreed underpayments. Nevertheless, respondent did not credit
the overpayments against the underpayments.
By checks dated July 20, 1995, and August 4, 1995, in the
respective amounts of $11,203,987 and $1,767,273, respondent
refunded the overpayment for 1984. Included in the refund was
interest calculated at the overpayment rate specified in section
6621(a)(1). By check dated September 5, 1995, in the amount of
$62,798, respondent refunded the overpayment for 1987 with
interest calculated in the same manner.
On or about July 26, 1995, petitioner executed a Form 870-AD
reflecting the partial settlement of its tax liabilities for the
years 1988 through 1991. The Form 870-AD showed agreed
underpayments of $909,763 for 1988, $911,371 for 1989, $9,513 for
1990, and $613,513 for 1991, or an aggregate of $2,444,160 of
agreed underpayments. The Form 870-AD also contained the
following statement: "The taxpayer reserves the right to
challenge the interest calculations made by the Internal Revenue
Service with respect to all years/periods covered by this
agreement." Respondent accepted the Form 870-AD on August 17,
1995, and on or about August 30, 1995, assessed the agreed tax
and mailed two Notices of Tax Due relating to the agreed
underpayments. Included in the amount of tax due was interest in
the amount of $2,003,589.91 calculated at the underpayment rate
specified in section 6621(a)(2) and (c).
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