William F. Urbano and Flota L. Urbano - Page 4

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          prematurely taking into account net operating loss (NOL)                    
          carrybacks to 1993 in disregard of section 6601(d)(1).                      
               We decide first whether petitioners may challenge in this              
          proceeding the existence and amount of the disputed interest.               
          We hold they may.  We decide second whether we are empowered to             
          decide petitioners’ alternative claims that (1) the service                 
          center’s recalculation of interest for 1993 was incorrect and               
          (2) respondent is precluded from collecting the amount reflected            
          in the recalculation.  We hold we are.  We decide third whether             
          the amount of the disputed interest, without consideration of any           
          abatement thereof, equals as of the time of the lien the amount             
          then sought by respondent.  We hold it does.  We decide fourth              
          whether any of the disputed interest qualifies for abatement                
          under section 6404(a)(1) or (e)(1).  We hold it does not.                   
               The facts in this background section are obtained from the             
          parties’ stipulation of facts, the exhibits submitted therewith,            
          and the pleadings.  Petitioners resided in Monarch Beach,                   
          California, when their petition was filed.                                  
               Petitioners’ 1993 Federal income tax return reported for               
          that year that petitioners had negative total income of $113,381,           
          negative taxable income of $175,161, and Federal income tax of              
          zero.  The return reported that the computation of total income             
          included interest income of $11,558, capital losses totaling                

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