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that they paid with respect to their Federal income tax
deficiency. The interest paid on petitioners’ individual tax
deficiency is personal interest regardless of the source of the
income generating the tax liability. The Courts of Appeals for
the Fourth, Sixth, Seventh, Eighth, and Ninth Circuits have
reached the same conclusion. Kikalos v. Commissioner, 190 F.3d
791 (7th Cir. 1999), revg. T.C. Memo. 1998-92; McDonnell v.
United States, 180 F.3d 721, 723 (6th Cir. 1999); Allen v. United
States, 173 F.3d 533, 538 (4th Cir. 1999); Redlark v.
Commissioner, 141 F.3d 936 (9th Cir. 1998), revg. 106 T.C. 31
(1996); Miller v. United States, 65 F.3d 687, 691 (8th Cir.
1995).
Penalties
Section 6662(a) imposes a 20-percent accuracy-related
penalty where the taxpayer’s underpayment of tax is attributable
to negligence or disregard of rules or regulations. See also
sec. 6662(b)(1). Respondent determined that petitioners are
liable for the accuracy-related penalty under section 6662(a)
based on petitioners’ negligence or disregard of rules or
regulations in the preparation of their 1994 and 1995 tax
returns.
Section 1.6662-3(c)(1), Income Tax Regs., provides an
exception to the penalties imposed under section 6662(b)(1) when
the taxpayer adequately discloses a position contrary to that of
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