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consideration exchanged for the residence included the $250,000
and $135,000 payments and 3 years of rent-free occupancy of the
residence. Thus, we need not determine whether petitioner’s
transfer of the residence to the Foundation was a contribution,
or whether petitioner had donative intent relating to such
transaction. Accordingly, petitioner is not liable for any
excise tax pursuant to section 4941(a)(1) or (b)(1).
Section 6684 imposes a penalty on a person who becomes
liable for a chapter 42 excise tax (i.e., such as those imposed
by section 4941) where the act or omission was not due to
reasonable cause and the person had been previously liable. The
penalty is also imposed when the act or omission was both willful
and flagrant. Because petitioner is not liable for tax pursuant
to chapter 42, petitioner is not liable for this penalty.
Contentions we have not addressed are moot, irrelevant, or
meritless.
To reflect the foregoing,
Decision will be entered
for petitioner.
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Last modified: May 25, 2011