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6621(c). The increased rate of interest under section 6621(c) is
120 percent of the statutory rate imposed on underpayments under
section 6601 if the underpayment exceeds $1,000 and is
attributable to a tax-motivated transaction (as defined in
section 6621(c)(3)). The increased interest is effective only
with respect to interest accruing after December 31, 1984,
notwithstanding that the transaction was entered into before that
date. Solowiejczyk v. Commissioner, 85 T.C. 552 (1985), affd.
per curiam without published opinion 795 F.2d 1005 (2d Cir.
1986).
This Court generally does not have jurisdiction to review
assessment of section 6621(c) tax-motivated interest in affected
item proceedings, even though the tax-motivated interest is an
affected item that requires a partner-level determination. See
White v. Commissioner, 95 T.C. 209 (1990); Korchak v.
Commissioner, T.C. Memo. 2005-244; see also Ertz v. Commissioner,
T.C. Memo. 2007-15. A narrow exception to this rule applies if a
taxpayer has paid the assessed tax-motivated interest and
subsequently invokes the overpayment jurisdiction of this Court
under section 6512(b). See Barton v. Commissioner, 97 T.C. 548
(1991). Petitioners do not claim that they have paid the
interest.
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Last modified: March 27, 2008