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301.6621-3(c)(1), Proced. & Admin. Regs. In the case of any
underpayment of a tax to which the deficiency procedures apply,
the applicable date is the 30th day after the earlier of the date
on which the Commissioner sends the 30–day letter or the notice
of deficiency. Sec. 6621(c)(2); sec. 301.6621-3(c)(2), Proced. &
Admin. Regs. Letters or notices involving amounts not greater
than $100,000 (determined by not taking into account any
interest, penalties, or additions to tax) are disregarded for
purposes of determining the applicable date.10 Sec.
6621(c)(2)(B)(iii).
It is undisputed that petitioner was liable for interest on
the original understatement of $225,753 for the period from the
due date of the return for the tax year ended January 31, 1994,
to the due date of the return for the tax year ended January 31,
1995. Additionally, it is undisputed that from the due date of
the return for the taxable year ended January 31, 1995, until the
date paid in full, petitioner was generally liable for interest
10As originally enacted, sec. 6621(c) did not contain the
provision disregarding letters or notices involving amounts not
greater than $100,000. The Taxpayer Relief Act of 1997, Pub. L.
105-34, sec. 1463(a), 111 Stat. 1057, added sec.
6621(c)(2)(B)(iii), applicable for purposes of determining
interest for periods after Dec. 31, 1997. The legislative
history indicates that Congress was concerned that minor
mathematical errors by the taxpayer might result in the
application of hot interest to a subsequently identified income
tax deficiency. H. Rept. 105-148, at 642 (1997), 1997-4 C.B.
(Vol. 1) 319, 964. The Commissioner has not updated the
regulations promulgated under sec. 6621(c) to reflect this
change.
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