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assesses the $300,000. The taxpayer then pays the amount
assessed and files a claim for refund. A Federal district court
determines that, exclusive of interest and penalties, the
taxpayer overpaid its income tax by $250,000.
Example 3 states that at the time of the assessment there
was a large corporate underpayment of $300,000. However, the
example goes on to state that because of the district court’s
decision that the taxpayer’s underpayment, exclusive of interest
and penalties, was only $50,000, the taxpayer does not have a
large corporate underpayment.
Respondent argues that despite the language contained in the
above regulations, petitioner had a large corporate underpayment.
With respect to section 301.6621-3(b)(2)(iii)(A), Proced. &
Admin. Regs., respondent claims that the term “generally”
indicates that assessments and abatements of assessment are not
necessarily dispositive. We disagree with respondent’s
interpretation.
Section 301.6621-3(b)(2)(iii), Proced. & Admin. Regs., and
Examples 2 and 3 indicate that the assessment date is generally
the operative date for purposes of determining whether there is
an underpayment of tax exceeding $100,000. If the assessment
reflects an underpayment exceeding $100,000, then there is a
large corporate underpayment at that time. However, if after a
judicial determination the taxpayer’s liability is determined to
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