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interest accruals terminated as of (a) June 1, 1992, and (b)
December 31, 1986.66
Respondent produced figures that would approximate the
overall fiscal consequences in the scenarios described above.
Respondent further calculated that, if interest on the aggregate
deficiencies were allowed to accrue unabated, it would amount to
almost 6 times the amount of the deficiencies:
Deficiencies $ 27,442,000
Interest through 12/31/05 155,078,215
Total 182,520,215
Respondent calculates that, in the case of a hypothetical
petitioner who owes $10,000 as a result of Kersting deductions
claimed for the taxable year 1980, the accrued interest payable
at the end of calendar year 2005 would have been $86,336,02.
For taxpayers who prepaid the deficiencies determined
against them, the results would be similarly substantial, but in
their favor. For example, we have considered the effect of a 62-
percent reduction in deficiencies on a hypothetical petitioner
who had prepaid a deficiency for 1980 of $10,000. Our
66On Sept. 17, 2003, Sticht, counsel for some of the nontest
case petitioners, filed a motion to strike respondent’s interest
estimates. The Court held that motion in abeyance, without
examining the estimates, until Nov. 16, 2004, when it entered an
order denying Sticht’s motion. We are aware of no authority
indicating that the Court may not be aware of the financial
consequences of the sanction it is being asked to order at the
conclusion of the case before it. In the final analysis,
however, in determining the sanctions to be imposed under the
mandates, the Court has not been influenced by respondent’s
projections.
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