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my consent to the immediate assessment and collection
of any increase in tax and penalties, and accept any
decrease in tax and penalties shown above, plus
additional interest as provided by law. It is
understood that this report is subject to acceptance by
the District Director.
Subsequently, respondent transferred the case to the service
center for assessment. Following its review of the Form 4549-CG
and supporting schedules, the service center concluded that the
revenue agent had understated the amount of interest due for 1993
by prematurely netting the NOL carrybacks from 1994 and 1996
against the adjustments for 1993. The service center determined
that the deficiency and related interest for 1993 were $130,926
and $39,558.63, respectively.
On March 20, 2002, respondent filed the NFTL to secure the
payment of the disputed interest of $31,455.49 shown in his
records still to be due from petitioners as of March 25, 2002,
with respect to their 1993 Federal income tax.3 Respondent had
assessed all of this interest on April 27, 1998. Petitioners
requested a hearing under section 6320(b) as to this filing, and
Appeals later held that hearing with Bellavia. At the hearing,
petitioners challenged the existence and amount of the interest
3 The reduction in interest from $39,558.63 to $31,455.49
was attributable to (1) $1,548.23 of interest that was included
in petitioners’ payment of $7,556.09, (2) $15.89 of overpayment
credits that were applied from 1995 and 1998, and (3) $6,539.02
of interest abated on May 4, 1998, in connection with
respondent’s same-day tax abatement of $79,726 from the 1996 NOL
carryback. (Respondent on Apr. 27, 1998, had abated $47,979 of
tax for the 1994 NOL carryback.)
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