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1996, and 1997 tax years in accord with the provisions of section
172.6 Benton v. Commissioner, 122 T.C. at 377.
As previously indicated, respondent concedes that petitioner
succeeded to and has available for use in his 1995, 1996, and
1997 tax years at least $10 million in NOLs generated by the
Benton estate. Respondent acknowledges that petitioner’s
application and use of that $10 million in NOLs would (1) reduce
to zero all income adjustments for petitioner’s 1995, 1996, and
1997 tax years determined by respondent in the notice of
deficiency and (2) eliminate the section 6651(a)(1) addition to
tax and section 6662 penalty determined for petitioner’s 1997
year. Respondent, however, argues that petitioner may not carry
back the NOLs to eliminate any liability for the accuracy-related
penalties under section 6662 for 1995 and 1996.
It is well established that in computing additions to tax
and/or penalties, an NOL carryforward deduction may result in the
reduction or elimination of additions and/or penalties.
Conversely, an NOL carryback deduction does not result in the
reduction or elimination of such additions and/or penalties.
See, e.g., Rictor v. Commissioner, 26 T.C. 913, 914-915 (1956)
(denying the use of an NOL carryback deduction to reduce an
6 As discussed more fully infra, a number of issues of
material fact remain in dispute between the parties concerning
the amount of NOLs generated by the Benton estate to which
petitioner succeeded.
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