- 15 - Bauspar participants through the Kersting project. Respondent’s identification of Bauspar participants appears instead to have been a “hit or miss” proposition; although respondent has disallowed some Bauspar deductions claimed by a few Kersting project petitioners, those disallowances have been sporadic. Because the Bauspar program was not included in respondent’s Kersting project, we refer to interest deductions claimed under the Bauspar program as Bauspar deductions rather than Kersting deductions. C. Respondent’s Project Settlement Offer Between 1982 and 1988, respondent had in effect an official settlement offer for the Kersting project. In general, the offer permitted participants in the Kersting programs to resolve their cases by agreeing to pay income tax deficiencies that averaged 7 percent less than those determined in their deficiency notices. The offer also released participants from negligence additions and increased interest. By September 1986, respondent’s counsel had agreed to modify the 7-percent reduction settlement offer to incorporate a new feature, called the “burnout”, that would apply in cases involving more than one taxable year. Under this procedure, the interest on a taxpayer’s total unpaid deficiencies for the first and second years of tax liability would not begin to accrue until the return due date for the second year. The burnout thusPage: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
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