- 8 -
assessed against the estate and paid by the trust, as well as an
additional $2,908,823 in statutory interest on the overpayment.
The parties have stipulated: “Upon receipt of the estate tax
refund check, the administratrix of the Hunter Estate provided the
check to Edith Hunter Hornberger, who negotiated it to the co-
trustees of the Hunter Trust, who deposited it into the Trust bank
account.”
Of the interest component of the refund check, petitioner
reported $2,866,927 (the portion which her representatives
calculated as the interest on the overpayment) on her 1992
individual tax return.7 The remainder of the interest component of
the refund check, $2,290,469, represented a return of a portion of
the $2,357,493 deficiency interest the trust paid in 1988.8
Neither petitioner, the trust, nor the estate reported the
$2,290,469 refund of overpaid assessed interest on her or its
respective 1992 return. No Form 1099-INT or other informational
return was issued to the estate or the trust.
7 The parties now agree that (1) the interest on the
overpayment is $2,908,823, and (2) the balance of $41,896 is also
reportable by petitioner as interest income.
8 On Mar. 18, 1999, respondent provided petitioners with
a copy of the IRS Office of Appeals posting voucher approving the
manual refund of estate taxes, additions to tax, and interest for
the estate refund. This posting voucher notes that the
$10,364,431 total payments included $2,290,469 in interest
previously assessed against the estate. It also specifies an
additional $2,908,823 of statutory interest on the Federal estate
tax overpayment that was included in the refund to the estate.
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