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denominator of $79,294 (the 1979-1981 tax deficiencies the
Thompsons would have paid absent the settlement).
D. Other Benefits Relating to the Thompsons’
1981 Tax Year
1. Elimination of the Thompsons’ Late
Filing (Non-Kersting) Addition for 1981
Petitioners maintain that the denominator of the settlement
fraction should be increased by $4,934.32, representing the late
filing addition in the Thompsons’ statutory notice for 1981 that
they would have had to pay absent the settlement of their 1979-
1981 tax years. We disagree. Respondent’s proposed application
of non-Kersting penalties and additions was specific to
individual taxpayers, unlike the Kersting-related deficiencies
and additions for which all affected taxpayers are liable. For
that reason, we believe it is appropriate to limit the benefit of
this aspect of the Thompson settlement (relief from liability for
non-Kersting additions) to those affected taxpayers who, like the
Thompsons, were subject to non-Kersting additions. We therefore
deal with this aspect of the Thompson settlement separately from
our determination of the percentage reduction in Kersting
deficiencies that will apply to all affected taxpayers. See
infra Part II.G.1.
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