- 11 - however, do not necessarily establish the fair market rate. See Estate of Arbury v. Commissioner, 93 T.C. 136, 143 (1989) (stating that the maximum rates set by usury laws do not necessarily reflect the economic value of the use of borrowed funds). Therefore, we need not decide whether ERISA preempts Michigan's usury laws. Respondent determined that the fair market interest rate is 10.5 percent and petitioners have not established that this rate is erroneous. See Welch v. Helvering, 290 U.S. 111, 115 (1933). Accordingly, we hold that, in determining the "amount involved" relating to petitioners' loan, 10.5 percent is the fair market interest rate. V. Addition to Tax Each disqualified person liable for section 4975 excise taxes with respect to a prohibited transaction is required to file Form 5330 for each taxable year, or portion thereof, in the taxable period. Sec. 6011; sec. 54.6011-1(b), Pension Excise Tax Regs. Section 6651(a)(1) imposes an addition to tax for the failure to file a required return, unless petitioners establish that such failure is due to reasonable cause and not due to willful neglect. Petitioners failed to file excise tax returns for the years in issue and have failed to establish that they had reasonable cause not to file such returns. Accordingly, petitioners are liable for the section 6651(a)(1) additions to tax. Decision will be entered for respondent.Page: Previous 1 2 3 4 5 6 7 8 9 10 11
Last modified: May 25, 2011