Estate of Burton W. Kanter, Deceased, Joshua S. Kanter, Executor, and Naomi R. Kanter, et al. - Page 120

                                                 -20-                                                   
            Estate of Robert W. Lisle, Deceased, Thomas W. Lisle and Amy L.                             
            Albrecht, Independent Co-executors, and Estate of Donna M. Lisle,                           
            Deceased, Thomas W. Lisle and Amy L. Albrecht, Independent Co-                              
            Executors                                                                                   
                                     Additions to Tax                Penalty                            
            Year Deficiency            Sec. 6653      Sec. 6661           Sec. 6662                     
            1984 $827,955           $41,397.75     $206,988.75              --                          
            1987  195,498           9,774.90       48,874.50              --                            
            1988  109,048           5,452.00           27,262.00   --                                   
            1989   109,049          --                 --          $21,810                              
                  Respondent determined in the notices of deficiency or                                 
            asserted in amended pleadings that the underpayments in tax were                            
            subject to increased interest under section 6621(c), formerly                               
            section 6621(d),11 as follows:  Burton W. and Naomi R. Kanter for                           
            the taxable years 1979,12 1980, 1982 to 1984, 1986, and 1987;                               
            Claude M. and Mary B. Ballard for the taxable years 1975 to 1982,                           
            1984, 1987, and 1988; and the Estates of Robert W. Lisle,                                   


                  11  Sec. 6621(d)(1) was added by the Deficit Reduction Act                            
            of 1984, Pub. L. 98-369, sec. 144(a), 98 Stat. 682, and provides                            
            for interest of 120 percent of the adjusted interest rate due on                            
            any substantial underpayment of tax attributable to tax-motivated                           
            transactions.  The increased interest is effective for interest                             
            accruing after Dec. 31, 1984.  In the Tax Reform Act of 1986,                               
            Pub. L. 99-514, sec. 1511(c), 100 Stat. 2744, sec. 6621(d)(1) was                           
            redesignated sec. 6621(c)(1).                                                               
                  12  With respect to the Kanter case at docket No. 3456-88,                            
            the applicability of sec. 6621(c) was asserted by respondent in                             
            an amendment to answer and applies only to an underpayment in tax                           
            of $206,239.63 attributable to a loss of $311,478 claimed by                                
            petitioners from Immunological Research Corp., an S corporation,                            
            which respondent disallowed.  In a second amendment to answer,                              
            respondent asserted the entire underpayment in tax for 1979 was                             
            subject to increased interest under sec. 6621(c).  On brief,                                
            respondent concedes the underpayment attributable to the                                    
            disallowed loss from Immunological Research Corp. is not subject                            
            to increased interest under sec. 6621(c) on the basis of Estate                             
            of Cook v. Commissioner, T.C. Memo. 1993-581.                                               




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