rule 155

[krystl5003]

What is the name of your state (only U.S. law)? Florida
I recently had an opinion by US Tax court that I have transferee liability for property given to me in 2003. The judge said it will be entered under rule 155. I received IRS computations for interest and they start at date of transfer until present when computing interest. My first question is does the interest accrue on top of interest? The principal amount owed is $41,000 and for 2003 there is 6% interest which is $2460. For 2004 is it 41,000 plus 7% or 41,000 + interest of 2460 and then 7% on that figure and on and on like that.

When presenting my computation to the court, is there anything I can ask for as far as interest goes or is it pretty much standard what the law says. If it is pretty much standard, then why is the court asking me to present my computations. Also, this was set for trial in 2006 and at the court the irs attorney got ill and got a continuance. The bottom line is that if they hadnt gotten the continuance then this matter would have been decided 2 years earlier than it actually was. I asked irs to abate 2 years of interest due to this and they refused. Do you think the court would possibly agree that interest in this time period should be abated?.

Is there anything I can present to the court in order to get the lowest possible interest tacked on. I cant understand why I am required to present computations if it is black and white what interest will be but I also cant afford to hire an attorney to find out if i have any possible options so any advice will be appreciated.

 

[tranquility]

I received IRS computations for interest and they start at date of transfer until present when computing interest. My first question is does the interest accrue on top of interest?

Yes, interest is amortized. I don't think your calculations are correct. But, since they're low, submit them and see if the IRS objects.

If it is pretty much standard, then why is the court asking me to present my computations.

Standard but changeable by court order. Lawyers went to law school because there is no math.

Do you think the court would possibly agree that interest in this time period should be abated?.

If you paid the tax you owed in the beginning, there would not be any interest. You had use of the money during that time. The argument never works as far as I know, but you can always ask. (It's usually made in audits that take longer to start or finish then they "should".)

 

[krystl5003]

Thank you for your reply. This is what the Irs is using in there 155 computation.

*transferee liability limited to the value of assests received in the total amount of $41,000. Interest accrues under Florida state law and florida state interest rates apply from the date of the transfer of assets to the date the notice of liability was issued to the transferee, i.e from 2/21/2003 to 10/17/2005

The interest rates are as follows
2003 6%
2004 7%
2005 7%
Interest accrues under the revenue code section 6601 from the date of the notice of liability i.e. from 10/17/2005 through full payment date.

Is this considered a good or fair computation? Should I just agree to it also?

 

[tranquility]

As I said, the computation will be amortized. Interest on interest.

 

[krystl5003]

I also found this information online that seems to breakdown what irs charges on interest for non corporate underpayments. Would this apply to me and if so, why is irs proposing numbers that are different.

These are the interest rates, by quarter, that the IRS charges on underpayments or pays on overpayments of taxes (e.g., estimated tax payments). There are three different tables; one for noncorporate Over- and underpayments; one for corporate, and one for large corporate (Over- or underpayments exceeding $10,000).

Interest Rate on Noncorporate Overpayments and Underpayments


Dates Overpayments Underpayments

Jul. 1, 2010 -- Sep. 30, 2010 4% 4%
Apr. 1, 2010 -- Jun. 30, 2010 4% 4%
Jan. 1, 2010 -- Mar. 31, 2010 4% 4%
Oct. 1, 2009 -- Dec. 31, 2009 4% 4%
Jul. 1, 2009 -- Sep. 30, 2009 4% 4%
Apr. 1, 2009 -- Jun. 30, 2009 4% 4%
Jan. 1, 2009 -- Mar. 31, 2009 5% 5%
Oct. 1, 2008 -- Dec. 31, 2008 6% 6%
Jul. 1, 2008 -- Sep. 30, 2008 5% 5%
Apr. 1, 2008 -- Jun. 30, 2008 6% 6%
Jan. 1, 2008 -- Mar. 31, 2008 7% 7%
Oct. 1, 2007 -- Dec. 31, 2007 8% 8%
Jul. 1, 2007 -- Sep. 30, 2007 8% 8%
Apr. 1, 2007 -- Jun. 30, 2007 8% 8%
Jan. 1, 2007 -- Mar. 31, 2007 8% 8%
Oct. 1, 2006 -- Dec. 31, 2006 8% 8%
Jul. 1, 2006 -- Sep. 30, 2006 8% 8%
Apr. 1, 2006 -- Jun. 30, 2006 7% 7%
Jan. 1, 2006 -- Mar. 31, 2006 7% 7%
Oct. 1, 2005 -- Dec. 31, 2005 7% 7%
Jul. 1, 2005 -- Sep. 30, 2005 6% 6%
Apr. 1, 2005 -- Jun. 30, 2005 6% 6%
Jan. 1, 2005 -- Mar. 31, 2005 5% 5%
Oct. 1, 2004 -- Dec. 31, 2004 5% 5%
Jul. 1, 2004 -- Sep. 30, 2004 4% 4%
Apr. 1, 2004 -- Jun. 30, 2004 5% 5%
Jan. 1, 2004 -- Mar. 31, 2004 4% 4%
Oct. 1, 2003 -- Dec. 31, 2003 4% 4%
Jul. 1, 2003 -- Sep. 30, 2003 5% 5%
Apr. 1, 2003 -- Jun. 30, 2003 5% 5%
Jan. 1, 2003 -- Mar. 31, 2003 5% 5%

 

[tranquility]

I don't know of all the facts about what is going on. I can't help you further.

 

[krystl5003]

Sorry for so many posts**************......isnt it strange that in irs computation they say exactly what interest will be for 2003, 2004 2005 but do not use specific numbers for 2006-2010?