PUBLIC LAW 98-369—JULY 18, 1984
98 STAT. 683
"(d) INTEREST ON SUBSTANTIAL UNDERPAYMENTS ATTRIBUTABLE TO TAX MOTIVATED TRANSACTIONS.—
"(1) IN GENERAL.—In the case of interest payable under section 6601 with respect to any substantial underpayment attributable to tax motivated transactions, the annual rate of interest established under this section shall be 120 percent of the adjusted rate established under subsection (b). "(2) SUBSTANTIAL UNDERPAYMENT ATTRIBUTABLE TO TAX MOTI-
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VATED TRANSACTIONS.—For purposes of this subsection, the term 'substantial underpayment attributable to tax motivated transactions' means any underpayment of taxes imposed by subtitle A for any taxable year which is attributable to 1 or more tax V motivated transactions if the amount of the underpayment for such year so attributable exceeds $1,000. .^ "(3) TAX MOTIVATED TRANSACTIONS.— •'ili "(A) IN GENERAL.—For purposes of this subsection, the term 'tax motivated transaction' means— "(i) any valuation overstatement (within the meaning of section 6659(c)), Post, p. 693. '"'• "• ' ' ^"(ii) any loss disallowed by reason of section 465(a) •" ' and any credit disallowed under section 46(c)(8), Post, pp. 805,810. "(iii) any straddle (as defined in section 1092(c) without regard to subsections (d) and (e) of section 1092), and "(iv) any use of an accounting method specified in -;;;.^\: ". regulations prescribed by the Secretary as a use which may result in a substantial distortion of income for any period. "(B) REGULATORY AUTHORITY.—The Secretary may by regulations specify other types of transactions which will be treated as tax motivated for purposes of this subsection and may by regulations provide that specified transactions being treated as tax motivated will no longer be so treated. X^w In prescribing regulations under the preceding sentence, the Secretary shall take into account— -^' • "(i) the ratio of tax benefits to cash invested, "(ii) the methods of promoting the use of this type of v_fis ktransaction, and "(iii) other relevant considerations. ' "(C) EFFECTIVE DATE FOR REGULATIONS.—Any regulations prescribed under subparagraph (A)(iv) or (B) shall apply SffI < v only to interest accruing after a date (specified in such regulations) which is after the date on which such regula'•'• tions are prescribed. "(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." Ob) CROSS REFERENCE.—Section 6214 (relating to determinations by
Tax Court) is amended by adding at the end thereof the following new subsection: "(e) CROSS REFERENCE.—
26 USC 6214.
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