- 16 -
This interpretation is consistent with other parts of the
regulations that discuss when an underpayment is determined.
Section 301.6621-3(b)(2)(iii), Proced. & Admin. Regs., provides:
(iii) When determined--(A) In general. The
existence of a threshold underpayment of a tax and
the amount of a large corporate underpayment are
generally determined only when an assessment is made
with respect to the taxable period. Thus, the amount
of a deficiency or proposed deficiency set forth
in a letter or notice pursuant to which the
applicable date is determined (under paragraph (c)
of this section) does not determine whether there
is a large corporate underpayment.
(B) Judicial determinations.
Notwithstanding any prior assessment made
with respect to a taxable period, the section
6621(c) rate does not apply if, after a
federal court determines the taxpayer’s
liability for a period, the threshold
underpayment for that taxable period does not
exceed $100,000. See Example 3 in paragraph (d)
of this section.
Section 301.6621-3(d), Examples (2) and (3), Proced. &
Admin. Regs., illustrate the application of the above
regulations. In Example 2, involving a corporation that
petitions the Tax Court for redetermination of a deficiency in
its income tax, the date of the Tax Court’s determination is the
operative date for purposes of determining the threshold
underpayment of tax. In Example 3, the Commissioner examines the
taxpayer’s return and subsequently sends a 30-day letter
proposing a deficiency of $450,000 and then a notice of
deficiency determining a $300,000 deficiency. The taxpayer does
not file a petition to the Tax Court, and the Commissioner
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011