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for boarding fee expenses. See sec. 1.6661-2(f)(1), Income Tax
Regs.
Finally, we note that, as discussed above, only one section
6662(a) accuracy-related penalty may be applied with respect to
any given portion of an underpayment. Sec. 1.6662-2(c), Income
Tax Regs. Because we have already held that the entire
deficiency in 1989 is subject to a section 6662(a) penalty, the
substantial understatement of income tax in 1989 does not
increase petitioners’ liability for the section 6662(a) penalty
for that year.
III. Tax Motivated Transactions
Section 6621(c) provides an increased rate of interest for
“any substantial underpayment attributable to tax motivated
transactions”. A “substantial underpayment attributable to tax
motivated transactions” is defined under section 6621(c)(2) as
“any underpayment of taxes imposed by subtitle A for any taxable
year which is attributable to 1 or more tax motivated
transactions if the amount of the underpayment for such year so
attributable exceeds $1,000.” A “tax motivated transaction” is
defined under section 6621(c)(3)(A) to include “any valuation
overstatement (within the meaning of section 6659(c))”, “any loss
disallowed by reason of section 465(a)”, and “any credit
disallowed under section 46(c)(8)”. Sec. 6621(c)(3)(A)(i) and
(ii).
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