Pen Coal Corporation, f.k.a. P&C \"Bituminous Coal \", Inc. v. Commissioner , 107 T.C. No. 14 ( 1996 )


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    107 T.C. No. 14
    UNITED STATES TAX COURT
    PEN COAL CORPORATION, f.k.a. P&C "BITUMINOUS COAL", INC.,
    Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
    PEN HOLDINGS, INC. AND SUBSIDIARIES, Petitioner v.
    COMMISSIONER OF INTERNAL REVENUE, Respondent
    Docket Nos. 23670-95, 23672-95.       Filed November 6, 1996.
    Ps filed petitions for redetermination contesting,
    inter alia, R's determination that Ps are liable for
    interest computed at the increased rate prescribed in
    sec. 6621(c), I.R.C., applicable to large corporate
    underpayments of tax. R filed motions to dismiss for
    lack of jurisdiction and to strike allegations relating
    to Ps' liability for interest under sec. 6621(c).
    Held: Sec. 6214(a) does not provide statutory
    authority for this Court to redetermine Ps' liability for
    interest computed at the increased rate prescribed in sec.
    6621(c). Held, further, R's motions to dismiss for lack of
    jurisdiction and to strike will be granted.
    - 2 -
    B. John Williams Jr., Carolyn O. Ward, and Miriam L. Fisher,
    for petitioners.
    Stephen M. Miller and Nancy W. Hale, for respondent.
    OPINION
    RUWE, Judge:   This case was assigned to Special Trial Judge
    Robert N. Armen, Jr., pursuant to the provisions of section
    7443A(b)(4) and Rules 180, 181, and 183.1     The Court agrees with
    and adopts the opinion of the Special Trial Judge, which is set
    forth below.
    OPINION OF THE SPECIAL TRIAL JUDGE
    ARMEN, Special Trial Judge:     These cases are before the
    Court on (1) respondent's Motion to Dismiss for Lack of
    Jurisdiction and to Strike as to Interest Due From the
    Petitioner, filed in docket No. 23670-95; and (2) respondent's
    Motion to Dismiss for Lack of Jurisdiction and to Strike as to
    the Taxable Year 1989 and as to Interest Due From the Petitioner,
    filed in docket No. 23672-95.
    As explained in greater detail below, the issue for decision
    is whether the Court has jurisdiction to redetermine petitioners'
    liability for interest computed at the increased rate established
    1
    Unless otherwise indicated, all section, chapter, and
    subtitle references are to the Internal Revenue Code in effect
    for the taxable years in issue, and all Rule references are to
    the Tax Court Rules of Practice and Procedure.
    - 3 -
    by section 6621(c) applicable to large corporate underpayments of
    tax.
    Background
    On August 17, 1995, respondent issued notices of deficiency
    to Pen Coal Corp. (Pen Coal) in which respondent determined the
    following deficiencies in, additions to, and accuracy-related
    penalty in respect of Pen Coal's Federal withholding taxes under
    chapter 3 of subtitle A:
    Additions to Tax and Penalty
    Sec.       Sec.      Sec.      Sec.
    Year     Deficiency   6651(a)(1)   6653(a)    6661       6662
    1986     $1,694,871    $423,718    $90,425      --         --
    1987      3,125,107       --          --     $781,277      --
    1988      1,638,186       --          --      409,547      --
    1989      1,600,390       --          --        --      $320,078
    Respondent also determined that Pen Coal's underpayments for the
    taxable years 1986 through 1989 constitute large corporate
    underpayments within the meaning of section 6621(c)(3) and that
    Pen Coal is therefore liable for interest computed at the
    increased rate prescribed in section 6621(c)(1).2    The notices of
    2
    Sec. 6621(c), which was enacted in its present form by sec.
    11341(a) of the Omnibus Budget Reconciliation Act of 1990, Pub.
    L. 101-508, 
    104 Stat. 1388
    -470, effective for purposes of
    determining interest for periods after Dec. 31, 1990, sets forth
    the rules for determining the amount of interest payable under
    sec. 6601 on large corporate underpayments of tax. Sec. 6621(c)
    provides in pertinent part:
    (continued...)
    - 4 -
    2
    (...continued)
    SEC. 6621(c). Increase In Underpayment Rate For Large
    Corporate Underpayments.--
    (1) In general.--For purposes of determining the
    amount of interest payable under section 6601 on any
    large corporate underpayment for periods after the
    applicable date, paragraph (2) of subsection (a) shall
    be applied by substituting "5 percentage points" for "3
    percentage points".
    (2) Applicable rate.--For purposes of this
    subsection--
    (A) In general.--The applicable date is
    the 30th day after the earlier of--
    (i) the date on which the 1st
    letter of proposed deficiency which
    allows the taxpayer an opportunity
    for administrative review in the
    Internal Revenue Service Office of
    Appeals is sent, or
    (ii) the date on which the
    deficiency notice under section
    6212 is sent.
    *     *     *     *     *     *     *
    (3) Large corporate underpayment.--For purposes of
    this subsection--
    (A) In general.--The term "large
    corporate underpayment" means any
    underpayment of a tax by a C corporation for
    any taxable period if the amount of such
    underpayment for such period exceeds
    $100,000.
    (B) Taxable period.--For purposes of
    subparagraph (A), the term "taxable period"
    means--
    (i) in the case of any tax
    (continued...)
    - 5 -
    deficiency also state that interest will be computed on the
    addition to tax under section 6651(a)(1) for the taxable year
    1986 pursuant to section 6601(e)(2).3
    On August 17, 1995, respondent issued notices of deficiency
    to Pen Holdings, Inc., and its subsidiaries (Pen Holdings) in
    which respondent determined the following deficiencies in, and
    additions to, Pen Holdings' Federal income taxes:
    2
    (...continued)
    imposed by subtitle A, the taxable
    year, or
    (ii) in the case of any other
    tax, the period to which the
    underpayment relates.
    3
    Sec. 6601(e)(2)(B) provides in pertinent part:
    SEC. 6601(e). Applicable Rules.--Except as otherwise
    provided in this title--
    *      *     *     *       *   *        *
    (2) Interest on penalties, additional amounts, or
    additions to the tax.--
    *      *     *     *       *   *        *
    (B) Interest on certain additions to
    tax.--Interest shall be imposed under this
    section with respect to any addition to tax
    imposed by section 6651(a)(1) * * * for the
    period which--
    (i) begins on the date on
    which the return of the tax with
    respect to which such addition to
    tax is imposed is required to be
    filed (including any extensions),
    and
    (ii) ends on the date of
    payment of such addition to tax.
    - 6 -
    Additions To Tax
    Year      Deficiency          Sec. 6651(a)(1)    Sec. 6661
    1982      $1,457,191               --            $364,298
    1983         990,664               --             247,666
    1984       1,510,584               --             377,646
    1985       2,317,050            $175,058          579,263
    1986       5,102,222               --           1,275,556
    1987       4,229,739               --             158,778
    1988       3,181,108               --               --
    Respondent also determined that Pen Holdings' underpayments for
    the taxable years 1982 through 1988 constitute large corporate
    underpayments within the meaning of section 6621(c)(3) and that
    Pen Holdings is therefore liable for interest computed at the
    increased rate prescribed in section 6621(c)(1).     The notices of
    deficiency also state that interest will be computed on the
    addition to tax under section 6651(a)(1) for the taxable year
    1985 pursuant to section 6601(e)(2).
    On August 17, 1995, respondent issued additional notices of
    deficiency to Pen Holdings in which respondent determined the
    following deficiencies in, and additions to, Pen Holdings'
    Federal withholding taxes under chapter 3 of subtitle A:
    Addition To Tax
    Year      Deficiency        Sec. 6651(a)(1)
    1982        $676,894          $169,223
    1983         972,657           243,164
    1984         729,143           182,286
    1985       1,079,888           269,972
    Respondent also determined that Pen Holdings' underpayments for
    the taxable years 1982 through 1985 constitute large corporate
    - 7 -
    underpayments within the meaning of section 6621(c)(3) and that
    Pen Holdings is therefore liable for interest computed at the
    increased rate prescribed in section 6621(c)(1).   The notices of
    deficiency also state that interest will be computed on the
    additions to tax under section 6651(a)(1) for the taxable years
    1982 through 1985, pursuant to section 6601(e)(2).
    All references to petitioners are to Pen Coal and Pen
    Holdings (and its subsidiaries).
    On November 14, 1995, petitioners separately filed petitions
    for redetermination with this Court contesting the notices of
    deficiency described above.   Each of the petitions contains
    allegations that respondent erred in her determinations regarding
    the imposition of interest under sections 6601(e)(2) and
    6621(c)(1).   Specifically, petitioners allege that they are not
    liable for interest computed at the increased rate prescribed in
    section 6621(c) because petitioners do not have a "large
    corporate underpayment" for any of the taxable years in issue.
    In the alternative, petitioners allege that respondent failed to
    allow them an opportunity for administrative review prior to the
    issuance of the notices of deficiency and that, as a consequence,
    the applicable date for computing increased interest under
    section 6621(c) is the date that the notices of deficiency were
    mailed.4
    4
    We note that pursuant to sec. 6621(c)(2)(A)(ii), the
    "applicable date" is the 30th day after the date on which the
    (continued...)
    - 8 -
    As indicated, respondent moved to dismiss for lack of
    jurisdiction and to strike the allegations in the petitions
    concerning petitioners' liability for interest.   Respondent
    contends that this Court lacks jurisdiction in these proceedings
    to redetermine petitioners' liability for interest under sections
    6601(e)(2) and 6621(c).
    Petitioners filed objections to respondent's motions in
    which they cited Ohio Farm Bureau Federation v. Commissioner, 
    106 T.C. 222
     (1996), and Northwestern Indiana Telephone Co. v.
    Commissioner, 
    T.C. Memo. 1996-168
    , for the proposition that this
    Court has the authority, by virtue of its jurisdiction to
    redetermine deficiencies in tax, to redetermine a corporation's
    liability for interest under section 6621(c).   In the
    alternative, petitioners argued in their objections that this
    Court has jurisdiction to redetermine such interest after payment
    and within 1 year of the date on which the decision of the Court
    becomes final, pursuant to section 7481(c).
    During the course of the oral argument on respondent's
    motions, counsel for both parties acknowledged that the Court's
    memorandum opinion in Northwestern Indiana Telephone Co. v.
    Commissioner, supra, had been modified (by Order dated April 17,
    1996) to eliminate all references to section 6621(c).    The
    parties also acknowledged that, although Ohio Farm Bureau
    (...continued)
    notice of deficiency is sent.
    - 9 -
    Federation v. Commissioner, supra, includes references to section
    6621(c), the Court did not address in that case the
    Commissioner's determination that the taxpayer was liable for the
    increased rate of interest applicable to large corporate
    underpayments of tax.   Id. at 223, 236 n.9.   In addition, counsel
    for petitioners conceded that the Court lacks jurisdiction as to
    petitioners' liability for interest under section 6601(e)(2).
    And, based on respondent's concession that no notice of
    deficiency was issued to Pen Holdings for 1989, counsel for
    petitioners also conceded that insofar as Pen Holdings is
    concerned, the Court lacks jurisdiction as to the taxable year
    1989.5
    Following the hearing on respondent's motions, both parties
    filed additional memoranda with the Court.
    Discussion
    The issue for decision in these cases is whether this Court
    has jurisdiction to redetermine petitioners' liability for
    interest computed at the increased rate prescribed by section
    6621(c) on large corporate underpayments of tax.   As explained in
    greater detail below, we conclude that we lack jurisdiction to
    redetermine such interest in these deficiency proceedings.    We
    leave for another day whether we have jurisdiction to determine
    5
    Both parties recognized that the Court may consider Pen
    Holdings' 1989 taxable year in determining its correct tax
    liability for the years in issue. Sec. 6214(b).
    - 10 -
    such interest in a supplemental proceeding commenced pursuant to
    section 7481(c) and Rule 261.
    Section 6601(a) provides the general rule that interest will
    be imposed at the rate established under section 6621 on any tax
    that is not paid on or before the last date prescribed for
    payment.    Section 6621(a)(2) provides the general rule that the
    underpayment rate shall be the sum of the Federal short-term rate
    determined under section 6221(b) plus 3 percentage points.
    Section 6621(c), which was enacted in its present form by
    section 11341(a) of the Omnibus Budget Reconciliation Act of
    1990, Pub. L. 101-508, 
    104 Stat. 1388
    , effective for purposes of
    determining interest for periods after December 31, 1990, sets
    forth the rules for determining the amount of interest payable
    under section 6601 on large corporate underpayments of tax.    As
    relevant herein, section 6621(c) provides that interest shall be
    computed on an underpayment of tax by a C corporation that
    exceeds $100,000 at an increased rate equal to the Federal short-
    term rate determined under section 6621(b) plus 5 percentage
    points.    The computation of interest under section 6621(c) is
    applicable for periods after the 30th day after the earlier of
    (1) the date of mailing of the first letter of proposed
    deficiency which allows the taxpayer the opportunity for the IRS
    Appeals Office review, or (2) the date of mailing of a notice of
    deficiency under section 6212.
    - 11 -
    Petitioners have attempted to place in dispute their
    liability for interest under section 6621(c) in an effort to have
    the Court determine the correct "applicable date" for computing
    such interest.   Petitioners allege that they were not given a
    meaningful opportunity for Appeals Office review and that the
    applicable date should be from August 17, 1995, the date on which
    the deficiency notices were mailed in these cases, rather than
    the earlier dates determined by respondent.6
    It is well settled that this Court is a court of limited
    jurisdiction and that we may exercise jurisdiction only to the
    extent expressly authorized by statute.   Sec. 7442; Judge v.
    Commissioner, 
    88 T.C. 1175
    , 1180-1181 (1987); Naftel v.
    Commissioner, 
    85 T.C. 527
    , 529 (1985).    It is equally well
    settled that this Court's jurisdiction to redetermine a
    deficiency in tax generally does not extend to statutory interest
    imposed under section 6601.   See Bax v. Commissioner, 
    13 F.3d 54
    ,
    56-57 (2d Cir. 1993), affg. an Order of this Court; LTV Corp. v.
    Commissioner, 
    64 T.C. 589
    , 597 (1975); see also Asciutto v.
    Commissioner, 
    T.C. Memo. 1992-564
    , affd. 
    26 F.3d 108
     (9th Cir.
    1994).   Indeed, section 6601(e)(1) expressly provides that
    interest prescribed by section 6601 is treated as tax "except
    [for purposes of] subchapter B of chapter 63, relating to
    deficiency procedures".   Because the effect of such language is
    to exclude interest from the definition of a "tax" for purposes
    6
    See supra note 4.
    - 12 -
    of section 6211(a), it follows that such interest is not a
    deficiency.   See White v. Commissioner, 
    95 T.C. 209
    , 213 (1990).
    Respondent moves to dismiss and to strike the allegations in
    the petitions insofar as they pertain to section 6621(c) on the
    grounds that (1) such interest does not fall within the
    definition of a deficiency under section 6211(a), and (2) there
    is otherwise no specific grant of statutory authority for this
    Court to redetermine a taxpayer's liability for such interest.
    Petitioners acknowledge the general limitations respecting
    this Court's jurisdiction as to statutory interest.
    Nevertheless, petitioners contend that section 6214(a) vests this
    Court with jurisdiction to redetermine interest computed at the
    increased rate prescribed in section 6621(c)(1).
    Section 6214(a)
    Section 6214(a) provides in pertinent part:
    SEC. 6214(a). Jurisdiction as to Increase of
    Deficiency, Additional Amounts, or Additions to the
    Tax.--Except as provided by section 7463, the Tax Court
    shall have jurisdiction to redetermine the correct
    amount of the deficiency even if the amount so
    redetermined is greater than the amount of the
    deficiency, notice of which has been mailed to the
    taxpayer, and to determine whether any additional
    amount, or any addition to the tax should be assessed,
    if claim therefor is asserted by the Secretary at or
    before the hearing or a rehearing. [Emphasis added.]
    Specifically, petitioners contend that section 6214(a) provides
    this Court with authority to redetermine interest computed at the
    - 13 -
    increased rate prescribed in section 6621(c) on the ground that
    such interest constitutes an "additional amount" within the
    meaning of section 6214(a).    In conjunction with the foregoing,
    petitioners contend that this Court's narrow interpretation of
    section 6214(a) in Bregin v. Commissioner, 
    74 T.C. 1097
     (1980),
    is erroneous.   Petitioners further contend that the lack of any
    mention of this Court's jurisdiction in section 6621(c), despite
    the presence of such a provision in former section 6621(c), is at
    most a neutral factor to be taken into account in resolving
    congressional intent.   We disagree with petitioners' contentions.
    In Bregin v. Commissioner, supra, the taxpayer filed a tax
    return for 1974 on which he claimed a credit for taxes withheld
    on his wages in excess of the amounts shown to have been withheld
    on his Forms W-2.   The Commissioner overlooked the discrepancy
    and allowed a refund to the taxpayer based on the withholding
    credit reported on the taxpayer's return.    Later, the
    Commissioner issued a notice of deficiency to the taxpayer in
    which the Commissioner determined that the taxpayer had received
    unreported income in 1974.    The notice did not include any
    allegation that the taxpayer had claimed any excessive credit.
    The taxpayer invoked this Court's jurisdiction by filing a
    petition for redetermination.
    Shortly before trial, the Commissioner filed a motion for
    leave to amend answer to include an allegation that the taxpayer
    had claimed an excessive withholding credit under section 31.
    - 14 -
    Although recognizing that the alleged excessive credit did not
    fall within the definition of a deficiency under section 6211(a),
    the Commissioner argued that the Court had jurisdiction over the
    issue on the ground that it constituted an "additional amount"
    within the meaning of section 6214(a).
    Upon review of the matter, we rejected the Commissioner's
    argument for several reasons.    First, we looked to chapter 68
    entitled "Additions to the Tax, Additional Amounts, and
    Assessable Penalties", for guidance as to the meaning of the term
    "additional amount" as used in section 6214(a).    In light of the
    similarity between the language used in section 6214(a) and the
    various provisions included under chapter 68, we concluded that
    the term "additional amount" as used in section 6214(a) was meant
    to refer to one of the assessable civil penalties described in
    chapter 68.   Bregin v. Commissioner, supra at 1102-1103.
    Next, we examined the plain language of section 6214(a) and
    its predecessors and reviewed the legislative history of such
    section.   We noted that section 6214(a) originated as section
    274(e) of the Revenue Act of 1926, ch. 27, 
    44 Stat. 56
    , which
    authorized this Court's predecessor, the Board of Tax Appeals, to
    determine "whether any penalty, additional amount or addition to
    the tax should be assessed."    Bregin v. Commissioner, supra at
    1103.   Although the term "penalty" was later omitted when section
    6214(a) was enacted as part of the Internal Revenue Code of 1954,
    we observed that the committee reports declared that no material
    - 15 -
    change was intended.   Id.    We further observed that the language
    in former section 274(e) expanding the Board's authority to
    determine whether "any penalty, additional amount or addition to
    the tax should be assessed" was added by the Senate Finance
    Committee for the express purpose of allowing the Commissioner to
    determine that a deficiency is attributable to fraud or
    negligence, after the issuance of a deficiency notice, but
    without requiring the Commissioner to issue a second notice of
    deficiency to the taxpayer.     Id. at 1103-1104 (citing S. Rept.
    52, 69th Cong., 1st Sess. (1926), 1939-1 C.B. (Part 2) 332, 353).
    We stated that "the legislative history of section 6214(a)
    indicates that the provision was not designed to have the broad
    meaning urged by the Commissioner."      Id. at 1104.
    We also pointed out in Bregin that the Commissioner was
    given the authority under section 6201(a)(3) to recover amounts
    due from a taxpayer's overstatement of withholding credits
    without issuing a notice of deficiency.     Under the circumstances,
    we could find no indication that Congress intended section
    6214(a) to provide the Commissioner with an alternative method
    for recovering on such a claim.     Id. at 1104-1105.
    Petitioners, like the Commissioner in Bregin, propose a
    broad interpretation of the term "additional amount" in section
    6214(a) in an effort to persuade the Court to exercise
    jurisdiction over an item that otherwise does not satisfy the
    statutory definition of a deficiency under section 6211(a).    In
    - 16 -
    furtherance of their position, petitioners assert that the
    Court's more restrictive interpretation of section 6214(a) in
    Bregin is erroneous on the grounds that (1) the Court's
    interpretation impermissibly renders the term "additional amount"
    a mere redundancy; and (2) the Court violated section 7806(b) by
    relying on the use of the term "additional amounts" in chapter 68
    in interpreting the term "additional amount" in section 6214(a).7
    We disagree with petitioners' assertion that this Court's
    interpretation of section 6214(a) in Bregin v. Commissioner, 
    74 T.C. 1097
     (1980), renders the term "additional amount" a mere
    redundancy.   As our detailed analysis of section 6214(a) and its
    legislative history in Bregin amply demonstrates, Congress used
    the phrase "any additional amount, or any addition to the tax" in
    section 6214(a) to ensure an understanding that this Court's
    jurisdiction encompasses items that are to be assessed,
    collected, and paid in the same manner as taxes, including the
    7
    Sec. 7806(b) provides in pertinent part:
    SEC. 7806(b). Arrangement and Classification.--No
    inference, implication, or presumption of legislative
    construction shall be drawn or made by reason of the
    location or grouping of any particular section or
    provision or portion of this title, nor shall any table
    of contents, table of cross references, or similar
    outline, analysis, or descriptive matter relating to
    the contents of this title be given any legal effect.
    * * *
    - 17 -
    additions to tax and other additional amounts (not labeled
    "additions to tax") described in chapter 68.8
    We likewise find petitioners' reliance on section 7806(b) to
    be misplaced.   Section 7806(b) provides that no inference,
    implication, or presumption of legislative construction shall be
    drawn or made by reason of the location or grouping of any
    particular section or provision or portion of title 26.   In
    Bregin, we did not draw an inference, implication, or presumption
    of legislative construction by reason of the location or grouping
    of any particular section or provision of the Internal Revenue
    Code in interpreting section 6214(a).   As explained above, we
    merely looked to chapter 68, and the meaning given to the term
    "additional amounts" therein, to aid in interpreting the same
    term as it is found in section 6214(a).   Simply stated, we see no
    tension between the Court's analysis in Bregin and the
    proscriptions of section 7806(b).
    Former Section 6621(c)
    Contrary to petitioners' contention, we also find former
    section 6621(c) and the case law interpreting that section to be
    relevant in resolving the jurisdictional issue presented by
    respondent's motions.    A brief review of the provisions of former
    section 6621(c), as well as the case law developed by this Court
    8
    We observe that the accuracy-related penalty imposed by
    current sec. 6662 and the fraud penalty imposed by current sec.
    6663 are both penalties and not additions to tax.
    - 18 -
    in regard to our jurisdiction thereover, will be helpful before
    we discuss this matter further.
    Former section 6621(c), originally codified as section
    6621(d) and applicable with respect to interest accruing after
    December 31, 1984, provided that interest payable under section
    6601 will be computed at a rate equal to 120 percent of the
    normal rate provided under section 6601 on any substantial
    underpayment of tax attributable to a tax-motivated transaction.9
    Former section 6621(c)(4) provided in pertinent part:
    (4) Jurisdiction of Tax Court.--In the case of any
    proceeding in the Tax Court for a redetermination of a
    deficiency, the Tax Court shall also have jurisdiction
    to determine the portion (if any) of such deficiency
    which is a substantial underpayment attributable to tax
    motivated transactions.
    In short, former section 6621(c)(4) established a limited
    exception to the general rule that this Court lacks jurisdiction
    over statutory interest by providing that, in a proceeding for
    redetermination of a deficiency, this Court has jurisdiction to
    determine the portion (if any) of such a deficiency that is a
    substantial underpayment attributable to tax-motivated
    transactions.
    9
    Sec. 6621(d) was added to the Internal Revenue Code by the
    Deficit Reduction Act of 1984, Pub. L. 98-369, sec. 144(a), 
    98 Stat. 494
    , 682. Sec. 6621(d) was redesignated sec. 6621(c) by
    the Tax Reform Act of 1986, Pub. L. 99-514, sec. 1511(c)(1)(A)-
    (C), 
    100 Stat. 2085
    , 2744. Former sec. 6621(c) was repealed by
    sec. 7721(b) of the Omnibus Budget Reconciliation Act of 1989,
    Pub. L. 101-239, 
    103 Stat. 2106
    , 2399, effective with respect to
    returns the due date for which is after Dec. 31, 1989.
    - 19 -
    The question of the scope of this Court's jurisdiction under
    former section 6621(c) arose in White v. Commissioner, 
    95 T.C. at 212
    -214, involving a so-called affected items proceeding.     In
    White, the Commissioner issued a notice of deficiency to the
    taxpayers solely for additions to tax after the underlying tax
    deficiency was assessed following the conclusion of partnership
    level proceedings.   The taxpayers filed a petition contesting the
    additions to tax as well as their liability for additional
    interest under former section 6621(c).   This prompted the
    Commissioner to file a motion to dismiss for lack of jurisdiction
    as to the additional interest.
    In granting the Commissioner's motion to dismiss in White,
    we first held, based upon a combined reading of sections 6211(a),
    6230(a), and 6601(e)(1), that interest computed at the increased
    rate prescribed in former section 6621(c)(1) is not a deficiency
    within the meaning of section 6211(a).   Consistent with this
    holding, we rejected the taxpayers' argument that section
    6230(a)(2)(A)(i) provided statutory authority for this Court to
    redetermine such interest.   Next, we analyzed former section
    6621(c)(4) and concluded that our jurisdiction under that
    provision is limited to cases where the parties dispute a
    deficiency in tax imposed by subtitle A, and, specifically, to
    determining whether a portion of such a deficiency constitutes a
    substantial underpayment attributable to tax-motivated
    transactions.   In other words, Congress granted this Court
    - 20 -
    limited authority to determine only the portion of a deficiency
    in tax that is subject to interest computed at the increased rate
    prescribed in former section 6621(c)(1).   Because the only items
    in dispute in White concerned additions to tax, the underlying
    deficiency in tax having been previously assessed as a
    computational adjustment pursuant to section 6230(a)(1), we held
    that former section 6621(c)(4) did not provide this Court with
    jurisdiction to redetermine the taxpayers' liability for
    increased interest under former section 6621(c).10    Accord
    Odend'Hal v. Commissioner, 
    95 T.C. 617
     (1990) (where addition to
    tax was sole item in dispute, this Court lacks jurisdiction to
    redetermine interest computed at the increased rate prescribed in
    former section 6621(c)(1)); cf. Barton v. Commissioner, 
    97 T.C. 548
     (1991) (this Court has jurisdiction to redetermine additional
    interest computed at the increased rate prescribed in former
    section 6621(c)(1) pursuant to this Court's jurisdiction to
    determine an overpayment under section 6512(b)(1)).
    Although the specific subject matter of present section
    6621(c) regarding corporate underpayments is different from that
    of former section 6621(c) regarding substantial understatements
    attributable to tax-motivated transactions, the operative
    principle common to both provisions is the imposition of
    10
    In concluding our opinion in White v. Commissioner, 
    95 T.C. 209
    , 217 (1990), we expressly suggested that congressional
    action would be needed to fill the jurisdictional gap identified
    in that case.
    - 21 -
    statutory interest at an increased rate.   Given the commonality
    of purpose of the two provisions, it is wholly appropriate to
    draw a negative inference from the fact that Congress expressly
    granted this Court jurisdiction in former section 6621(c)(4) but
    failed to do the same in present section 6621(c).   In this
    regard, a brief recapitulation of the various elements of our
    analysis will buttress the point and expose the inherent weakness
    in petitioners' position.
    As previously discussed, this Court's jurisdiction to
    redetermine a deficiency in tax generally does not extend to
    statutory interest imposed under section 6601.   Significantly,
    section 6601(e)(1) provides that the deficiency procedures set
    forth in subchapter B of chapter 63 are not applicable to
    interest imposed under section 6601.   In addition to these
    principles, we have discussed this Court's opinion in Bregin v.
    Commissioner, 
    74 T.C. 1097
     (1980), where we held that the term
    "additional amount" in section 6214(a) is limited to the
    assessable civil penalties described in chapter 68.   These
    factors alone are adequate to overcome petitioners' assertion
    that section 6214(a) provides a jurisdictional basis for this
    Court to redetermine interest computed at the increased rate
    prescribed in present section 6621(c).
    Moreover, when Congress' enactment of former section
    6621(c)(4) is also taken into account, the result is overwhelming
    confirmation that (1) petitioners' reliance on section 6214(a) is
    - 22 -
    misplaced; and (2) Congress simply did not intend for this Court
    to exercise jurisdiction, at least in the context of a deficiency
    proceeding, to redetermine a taxpayer's liability for interest
    computed at the increased rate prescribed in present section
    6621(c).
    With regard to the first point, we note that if petitioners'
    theory that section 6214(a) provides this Court with jurisdiction
    to redetermine interest under section 6621(c) were correct, there
    would have been no need for Congress to enact former section
    6621(c)(4).11    Thus, in order to avoid an interpretation that
    would render former section 6621(c)(4) redundant and superfluous,
    it follows that petitioners' theory of jurisdiction is incorrect.
    In addition to the foregoing, we believe that former section
    6621(c)(4) reflects Congress' understanding of the need to
    specifically define this Court's jurisdiction with respect to
    matters involving statutory interest in recognition of section
    6601(e)(1), which serves to deny this Court jurisdiction over
    such interest.    Against this background, we conclude that
    Congress would have expressly granted this Court jurisdiction to
    redetermine interest computed at the increased rate prescribed by
    present section 6621(c) if such had been the intent of Congress.
    11
    Further, taking petitioners' theory to its logical
    conclusions, the issue might arise whether this Court has
    jurisdiction as to interest in general, notwithstanding the
    provisions of sec. 6601(e) or as to any item that would not
    otherwise satisfy the definition of a deficiency under sec.
    6211(a).
    - 23 -
    Section 7481(c)
    Petitioners' initial objections to respondent's motions to
    dismiss included an alternative argument that this Court has the
    authority, by virtue of section 7481(c), to consider petitioners'
    liability for interest computed at the increased rate prescribed
    in section 6621(c).
    Section 7481(c), codified by section 6246(a) of the
    Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647,
    
    102 Stat. 3342
    , 3751, serves to confer jurisdiction on this Court
    to resolve disputes concerning respondent's post-decision
    computation of statutory interest; i.e., to determine interest on
    deficiencies that have been redetermined by this Court and
    assessed under section 6215.   See, e.g., Stauffacher v.
    Commissioner, 
    97 T.C. 453
     (1991); Note to Rule 261, 
    93 T.C. 821
    ,
    1040-1041 (1989).
    Section 7481(c) provides in pertinent part as follows:
    SEC. 7481(c). Jurisdiction Over Interest
    Determinations.--Notwithstanding subsection (a), if--
    (1) an assessment has been made by the
    Secretary under section 6215 which includes
    interest as imposed by this title,
    (2) the taxpayer has paid the entire
    amount of the deficiency plus interest
    claimed by the Secretary, and
    (3) within 1 year after the date the
    decision of the Tax Court becomes final under
    subsection (a), the taxpayer files a petition
    in the Tax Court for a determination that the
    - 24 -
    amount of interest claimed by the Secretary
    exceeds the amount of interest imposed by
    this title,
    then the Tax Court may reopen the case solely to
    determine whether the taxpayer has made an overpayment
    of such interest and the amount of any such
    overpayment. * * *
    Notably, petitioners abandoned their alternative position in
    the memoranda that they filed after the hearing in these cases.
    Petitioners now assert that the question regarding the
    "applicable date" for computing interest at the increased rate
    prescribed in section 6621(c) is not an issue the resolution of
    which falls within this Court's jurisdiction under section
    7481(c).   Petitioners further assert that if this Court also
    lacks jurisdiction to redetermine their liability for such
    interest in these deficiency proceedings, then they would be left
    without a remedy in this Court.12
    Consistent with the plain language of section 7481(c), it is
    evident that the proceeding contemplated by such section may only
    be brought after this Court's decision regarding the underlying
    deficiency is final and the taxpayer has paid the interest in
    dispute.   See Asciutto v. Commissioner, 
    T.C. Memo. 1992-564
    ,
    affd. 
    26 F.3d 108
     (9th Cir. 1994).     Accordingly, the scope of
    this Court's jurisdiction under section 7481(c) is not a matter
    that is properly before us at this time, and we therefore leave
    12
    Petitioners do not assert that they would be without a
    remedy in some other court.
    - 25 -
    consideration of that issue for another day.    Suffice it to say
    that the mere possibility that our jurisdiction may be limited in
    a proceeding under section 7481(c) to determine petitioners'
    liability for interest pursuant to section 6621(c) does not
    provide the requisite statutory basis for us to exercise
    jurisdiction over that matter in these deficiency proceedings.
    Conclusion
    In order to reflect the foregoing,
    Orders granting respondent's
    Motions to Dismiss for Lack of
    Jurisdiction and to Strike
    will be issued.