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Because petitioner was not issued a notice of deficiency and
he did not previously have the opportunity to dispute the
underlying tax liability, he may question the validity of the
underlying tax liability, and we review respondent’s
determination de novo. See Montgomery v. Commissioner, 122 T.C.
1, 9 (2004).
Petitioner contends that he had a payment arrangement under
which two payments totaling $26,696.48 by the dates stated would
completely satisfy his 2002 tax liability, including interest and
penalties that accrued to the date of the last payment.
Petitioner further contends that he made timely payments of the
required amounts (less 24 cents each rounded down in conformity
with respondent’s conventions) and that his 2002 tax liability is
therefore satisfied. Petitioner believes that the $439.52 in
interest and penalties arose from a “phantom” 48 cents that
petitioner contends did not remain unpaid because of a permitted
rounding method.
In response, respondent contends that the $439.52 of
interest and penalties would have accrued irrespective of whether
petitioner paid the 48 cents. To support this contention,
respondent attempted to show that interest and penalties would
have accrued on the $25,044 that remained unpaid at the time
petitioner filed his return.
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Last modified: May 25, 2011