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IV. Equitable Estoppel
Petitioners argued at trial that they object to the
imposition of additions to tax and interest on the deficiencies.
They argue that respondent knew that there were problems with the
Hoyt partnerships, but that respondent nevertheless allowed
petitioners to continue in their investment and to keep receiving
refunds based on the returns they filed that were prepared by the
Hoyt organization. To the same effect, petitioners stated in a
document filed with the Court prior to trial:
We would like to add, the interest and penalties, we
strongly object to. The fault lies with the Internal
Revenue Service. They allowed us to join in a partnership,
that was illegal the year we joined. The interest and
penalties, have been accruing since 1984.
We note that, while this Court has jurisdiction to review the
applicability of the section 6621(c) increased rate of interest,
discussed above, we generally lack jurisdiction to redetermine
the amount of interest due on a deficiency under section 6601
prior to entry of a decision redetermining the deficiency. See
sec. 6621(c)(4); sec. 7481(c), as currently in effect; Rule 261;
Pen Coal Corp. v. Commissioner, 107 T.C. 249 (1996); see also
sec. 6404(h), as currently in effect (regarding judicial review
of a failure to abate interest). Thus, petitioners’ arguments
concerning the amount of interest due on the deficiencies is not
properly before the Court at this time. To the extent that
petitioners’ arguments can be interpreted as a claim that
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