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under section 6621(c). Petitioner has paid the deficiency
assessed for the tax year ended January 31, 1994, plus the
interest and penalties claimed by respondent.
Petitioner provided interest and penalty detail reports
calculating petitioner’s interest liability applying section
6621(c) and not applying section 6621(c). If we decide that
section 6621(c) does apply, petitioner does not dispute the
accuracy of respondent’s original interest computation. In the
event we decide that section 6621(c) does not apply, respondent
concedes that petitioner’s interest computation is correct. The
interest in dispute is $12,104.88.
Discussion
The parties dispute whether the increased interest rate
prescribed under section 6621(c), or “hot interest”, applies.4
Petitioner claims that hot interest does not apply because the
deficiency amount decided by this Court and assessed by
respondent did not exceed $100,000. Respondent contends that for
purposes of applying hot interest the underpayment of tax is the
amount computed before allowance of any NOL carryback. Before we
4The increased interest rate assessed on large corporate
underpayments is commonly known as “hot interest”. RHI Holdings,
Inc. v. United States, 142 F.3d 1459, 1460 (Fed. Cir. 1998);
Saltzman, IRS Practice and Procedure, par. 6.02[3][e] (2d ed.
1991); Abreau, “Distinguishing Interest from Damages: A Proposal
for a New Perspective”, 40 Buff. L. Rev. 373, 395 (1992).
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