- 18 -
not exceed $100,000, then there is no large corporate
underpayment and hot interest does not apply. The use of the
word “generally” in section 301.6621-3(b)(2)(iii)(A), Proced. &
Admin. Regs., accounts for judicial determinations. A subsequent
judicial determination overrides a previous assessment and
represents the operative date for purposes of determining whether
there is a large corporate underpayment. As illustrated by
example 3 in the regulations, this concept is important in the
case of a taxpayer seeking a refund in a Federal district court
because any deficiency will generally be assessed before the
judicial determination is made. However, in proceedings properly
before this Court, the Commissioner generally does not assess the
deficiency until the Court’s decision becomes final. In this
case, after the decision became final, respondent assessed the
deficiency of $63,573. Therefore, the assessment in this case
did not reflect a threshold underpayment of tax exceeding
$100,000.
With respect to section 301.6621-3(b)(2)(iii)(B), Proced. &
Admin. Regs., respondent claims that the Court’s decision
determined a deficiency, but it did not determine any issue with
respect to the existence of a large corporate underpayment.
Respondent contends that there was a large corporate underpayment
because from at least the return due date for the tax year ended
January 31, 1994, until the return due date for the tax year
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