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substantial understatements of their income tax liabilities for
the taxable years 1982 and 1983 at a rate equal to 10 percent of
the underpayment. In short, the Youngs and the DuFresnes had
contested the addition to tax only insofar as their liabilities
depended upon respondent's prevailing on their deficiencies to a
sufficient extent to exceed the substantial understatement
threshold of section 6661(b)(1)(A) (deficiency must exceed
greater of 10 percent of the tax required to be shown on the
return, or $5,000). See id. at 1513-1514, 1991 T.C.M. (RIA), at
91-3058.
iv. Increased Interest
Judge Goffe sustained respondent's determinations that the
Thompsons were liable for interest computed at the increased rate
prescribed in section 6621(c) for 1981, that the Youngs were
liable for such increased interest for the taxable year 1982, and
that the DuFresnes were liable for such increased interest for
the taxable years 1982 and 1983.110 In short, Judge Goffe
sustained these determinations on the ground that the Court had
already determined that the test case petitioners' underpayments
were attributable to "tax motivated transactions"; viz, sham
transactions, as provided in section 6621(c)(3)(A)(v). See id.
at 1514, 1991 T.C.M. (RIA), at 91-3058.
110 Nontest case petitioners who signed post-1985 piggyback
agreements agreed to be bound by the Court’s determination in the
test cases regarding the applicability of sec. 6621(c).
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