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A threshold underpayment of tax is defined for this purpose
as the excess of a tax imposed by the Internal Revenue Code (the
Code) (exclusive of interest, penalties, additional amounts, and
additions to tax) for the taxable period over the amount of tax
paid on or before the last date prescribed for payment. Sec.
301.6621-3(b)(2)(ii), Proced. & Admin. Regs. This case turns on
when the tax imposed by the Internal Revenue Code for purposes of
determining the amount of a threshold underpayment is determined.
If determined at the time hot interest starts to accrue, when the
tax was assessed, or after this Court’s decision, petitioner
prevails. If determined at the time petitioner’s return was
filed, respondent prevails. On the basis of the Code and the
regulations, we hold that the determination in this case is made
no sooner than the time of entry of our decision that there was a
deficiency of $63,573.
The first step is to determine the amount of tax imposed by
the Code on petitioner for the tax year ended January 31, 1994.13
Section 11(a) imposes a tax for each tax year on the taxable
income of a corporation. Taxable income is the corporation’s
gross income minus the deductions allowed by chapter 1 of the
Code. Lastarmco, Inc. v. Commissioner, 79 T.C. 810, 812 (1982),
13The taxable period in this case is the taxable year
because the taxes at issue are income taxes imposed by subtitle A
of the Code. Sec. 6621(c)(3)(B); sec. 301.6621-3(b)(4), Proced.
& Admin. Regs.
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