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FOLEY, J., dissenting: Petitioner’s valid return, which
should be the basis for calculating the section 6654 penalty, is
disregarded by the majority and “not [considered] * * * to be a
‘return’ for purposes of section 6654(d)(1)(B)(i).” Majority op.
p. 27. There is no authority for the majority’s holding, and it
is contrary to the unambiguous terms of the statute.
Section 6654 provides for an addition to tax if the taxpayer
fails to make the “required annual payment”. Sec. 6654(a) and
(b). The “required annual payment” is:
the lesser of (i) 90 percent of the tax shown on the
return for the taxable year (or, if no return is filed,
90 percent of the tax for such year), or (ii) 100
percent of the tax shown on the return of the
individual for the preceding taxable year. [Sec.
6654(d)(1)(B)(i) and (ii); emphasis added.]
The majority recognizes that these are “mechanical rules”, yet,
presumably acknowledging that the terms of the statute are
satisfied, states that “the issue [is] * * * whether petitioner
may rely on having satisfied the requirement of section
6654(d)(1)(A) and (B)”. Majority op. p. 25. The statute is
unambiguous, and the taxpayer may certainly “rely” on having met
its terms. The statute does not refer to a return filed prior to
an Internal Revenue Service audit or a return filed prior to the
issuance of a notice of deficiency. A valid return will suffice-
–without regard to when it is filed.
We need not, however, adhere to a literal application of a
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