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sons of her entire interest in the True companies listed in
Appendix schedule 3. The attachment listed the interests in the
partnerships and corporations that were sold and indicated, in
general terms, that the sales price was book value, without
providing actual numbers. The amended 1994 gift tax return
reported zero as the value of gifts attributable to these
transactions. Jean True did not disclose the gift loan that
arose out of the deferred payment transaction on either her
original or her amended 1994 gift tax return.
In the August 1988, “Policy for the Perpetuation of the
Family Business” (policy), the True family agreed that tax
planning played a crucial role in every business decision. The
policy stated: “In considering potentially controversial tax
issues, we will include the criteria [sic] whether we are willing
to take the issue to court.”
In the statutory notices, respondent determined accuracy-
related penalties under section 6662(a), (g), and (h)
attributable to valuation misstatements allegedly reported in the
1993 and 1994 gift tax returns and the estate tax return.
Respondent continued to argue for imposition of these penalties
at trial and on brief.
OPINION
Section 6662 imposes a 20-percent penalty on any portion of
an underpayment of tax that is attributable to, inter alia, any
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