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Additions to Tax
Quarter Ending Deficiency Sec. 6651(a)(1) Sec.
6653(a)
Mar. 31, 1980 $1,248,737 $312,184 $62,437
June 30, 1980 588,884 147,221 29,444
Sept. 30, 1980 158,804 39,701 7,940
Dec. 31, 1980 296,003 74,001 14,800
Mar. 31, 1981 611,271 152,818 30,564
Total 2,903,699 725,925 145,185
All section references are to the Internal Revenue Code in
effect for 1980 and 1981, and all Rule references are to the Tax
Court Rules of Practice and Procedure, unless otherwise noted.
After concessions, the Court must decide: (1) Whether
petitioner gifted coal, uranium, oil, and gas leases (collec-
tively, mineral leases), or overriding royalty interests,1 to his
wife; if so, (2) the value of such gifts; and (3) whether peti-
tioner is liable for additions to tax for not filing Federal gift
tax returns and for negligently or intentionally disregarding the
applicable rules and regulations. Petitioner concedes that he
made completed gifts of overriding royalties to trusts for the
benefit of his children; the parties do not agree, however, on
royalty values for purposes of computing the gift tax.
FINDINGS OF FACT
We incorporate in this opinion the parties’ stipulation of
facts, stipulation of settled issues, and exhibits. Petitioner,
1An overriding royalty represents the right to a fraction or
percentage of the lessee's share of the minerals removed, as
distinguished from the royalty interest retained by the lessor.
See William & Meyers, Manual of Oil and Gas Terms 765 (9th ed.
1994).
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