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imposition against them of increased interest would violate due
process of law.1 See sec. 301.6621-2T, A-4, Temporary Proced. &
Admin. Regs., 49 Fed. Reg. 50392 (Dec. 28, 1984).
As we explained in Krause v. Commissioner, 99 T.C. at 180,
imposition of increased interest under section 6621(c), and its
predecessor section 6621(d), is largely mechanical. Section
6621(c) provides an increased rate of interest for substantial
underpayments attributable to tax-motivated transactions.
Substantial underpayments are defined as underpayments in excess
of $1,000. By legislative regulation, see sec. 6621(c)(3)(B),
among the types of transactions that are considered to be tax-
motivated transactions within the meaning of section 6621(c) are
those with respect to which related tax deductions are disallowed
under section 183 for lack of profit objective. See Rybak v.
Commissioner, 91 T.C. 524, 568 (1988); sec. 301.6621-2T, A-4(1),
Temporary Proced. & Admin. Regs., 49 Fed. Reg. 50392 (Dec. 28,
1984).
We note that in 1986, in amending section 6621(c) to include
sham transactions among the specified types of transactions that
trigger increased interest, congressional reports expressly
commented with approval on the temporary legislative regulations
under section 6621(c) that included lack of profit motive or
1 As of June 30, 1990, respondent asserts approximately
$250,000 of increased interest under sec. 6621(c) and in excess
of $2 million of regular interest under sec. 6621(a).
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