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Petitioners suggest that their calculations are supported by
the manner by which interest calculations routinely are adjusted
in commercial debtor-creditor relationships for changes either in
the principal amount outstanding or in the interest rate. We
disagree. The “wrinkle” petitioners acknowledge herein that is
not typical in the routine debtor-creditor relationship is that
petitioners seek to apply the reduced interest rate not to the
full outstanding balance of the overpayment interest on the
effective date of the rate reduction but only to a portion
thereof. It is that wrinkle that is in issue, and we find no
support in petitioners’ examples for the proposition petitioners
seem to put forth that under commercial debtor-creditor loan
agreements a prospective reduction in the applicable interest
rate similar to that reflected in the GATT amendment necessarily
would not apply to overpayment interest balance on the effective
date of the rate reduction.
We conclude that petitioners’ December 31, 1994,
$1.6 billion overpayment interest balance accrues interest after
December 31, 1994, at the reduced GATT rate.
As a related issue, petitioners contend that under section
6621(a)(1) the $10,000 exemption from the reduced GATT rate
should apply to the last $10,000 of their tax overpayment for
each year.
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