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OPINION
GOEKE, Judge: On March 17, 2003, petitioner filed a motion
to redetermine interest under section 7481(c) and Rule 261.1
Petitioner, a C corporation, claims that it overpaid interest
relating to its income tax liability for its tax year ended
January 31, 1994, because respondent erroneously applied the
increased interest rate under section 6621(c) (“hot interest”).
The substantive issue for decision is whether a net operating
loss (NOL) carryback which reduces an underpayment of tax for a
preceding year below $100,000 is disregarded for purposes of
determining whether a large corporate underpayment exists and
whether hot interest applies. We hold that the NOL is not
disregarded and hot interest does not apply. Before we address
the substantive issue, we explain the Court’s jurisdiction to
decide the matter.
Background2
On November 5, 1998, respondent sent a letter of proposed
deficiency (30-day letter) to petitioner proposing a deficiency
1Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect at the time of the filing of
the motion, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
2For purposes of deciding this motion, we rely in part on
the information contained in the petitions, answer, stipulations,
and decision document. The facts subsequent to the date the
decision was entered are based on the parties’ undisputed factual
allegations.
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Last modified: May 25, 2011