- 20 - Post-Assessment Determinations of the Amount of the Threshold Underpayment Commentators argued that the section 6621(c) rate should not apply if it is determined after assessment that the threshold underpayment is less than $100,000. The section 6621(c) rate does not apply if, as a result of a full or partial abatement of an assessment to correct an administrative error on the part of the Service, the taxpayer’s threshold underpayment does not exceed $100,000. The final regulations also provide that the section 6621(c) rate does not apply, if, as a result of a court determination of the taxpayer’s liability, the threshold underpayment is less than $100,000. However, a net operating loss or credit carryback does not reduce the amount of the threshold underpayment for an earlier taxable period. [T.D. 8447, 1992-2 C.B. 313, 315; emphasis added.] The heading of the paragraph indicates that this portion of the preamble is referring to postassessment determinations that potentially affect the amount of a threshold underpayment. In such a situation, the preamble states that an NOL does not reduce the amount of an underpayment for an earlier taxable period. The instant case does not involve a postassessment determination. Rather, at the time of the Court’s decision and the subsequent assessment, the parties were fully aware of the NOL, and petitioner’s liability for the tax year at issue was computed with allowance for the NOL carryback. The regulations do not state that a liability or threshold underpayment is not adjusted to account for an NOL for purposes of determining whether section 6621(c) applies. Rather, the regulations generally provide that if the liability assessed by respondent or decided by this Court does not exceed $100,000,Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Next
Last modified: May 25, 2011