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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.
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