        STEVEN YARI, PETITIONER v. COMMISSIONER
           OF INTERNAL REVENUE, RESPONDENT

        Docket No. 13925–12L.       Filed September 15, 2014.

      R assessed a penalty under I.R.C. sec. 6707A. R issued a
    notice of intent to levy to collect this penalty. P requested a
    collection due process hearing, challenging the collection
    action. While the hearing was pending Congress retroactively
    changed the manner in which I.R.C. sec. 6707A penalties are
    calculated. P requested that R recalculate the penalty using
    the amount of tax shown on subsequent amended returns. R
    decided the penalty should not be changed, and P appealed
    this decision. The IRS Appeals Office agreed that the penalty
    amount should not be changed, and R issued a notice of deter-
    mination sustaining the collection action. P believes that the
    appropriate penalty calculation should use the actual tax due,
    not the tax shown on the return on which he was obliged but
    failed to disclose the reportable transaction. P seeks to change
    the penalty from the current amount assessed, $100,000, to
    the minimum under the statute, $5,000. Held: We have juris-
    diction to consider the penalty. Held, further, the penalty is
    calculated by reference to the amount of tax shown on the
    return with respect to which the taxpayer had a disclosure
    obligation.

 Steven R. Mather, for petitioner.
 Michael W. Tan, for respondent.

                              OPINION

  WHERRY, Judge: This case is before us on a petition for
review of a Notice of Determination Concerning Collection
                                                                       157
158          143 UNITED STATES TAX COURT REPORTS                     (157)


Action(s) Under Section 6320 and/or 6330 (notice of deter-
mination) sustaining a notice of intent to levy with respect
to a penalty assessed for the 2004 tax year. 1 The case pre-
sents an issue of first impression as to whether section
6707A requires respondent to use the tax shown on the
return giving rise to the disclosure obligation or whether
respondent must use the tax as shown on subsequent,
amended returns. We hold that respondent may calculate the
amount of the penalty using the tax shown on the return
giving rise to the violation of the disclosure obligation.

                             Background
   This case was submitted fully stipulated pursuant to Rule
122. The parties’ stipulation of settled issues and stipulation
of facts, with accompanying exhibits, are incorporated herein
by this reference. At the time he filed his petition, petitioner
resided in California.
   Petitioner formed Topaz Global Holdings, LLC (Topaz
Global), on December 22, 2000. Under the regulations, Topaz
Global was a disregarded entity for Federal income tax pur-
poses. See sec. 301.7701–3, Proced. & Admin. Regs. On
December 23, 2002, petitioner formed Faryar, Inc., a Nevada
corporation, which elected to be treated as an S corporation
for Federal income tax purposes. Faryar entered into agree-
ments with Topaz Global and other companies to provide
management services. We refer to Faryar’s relationship with
these companies as the management fee transaction.
   In 2002 petitioner opened a Roth individual retirement
account (Roth IRA) with an initial contribution of $3,000.
The Roth IRA acquired all of the Faryar stock for $3,000,
making the Roth IRA the sole shareholder of the S corpora-
tion. 2 For the 2002 through 2007 tax years Faryar reported
a total net income of $1,221,778 in management fees and
interest income less deductions. Because Faryar was an S
  1 Allsection references are to the Internal Revenue Code (Code) of 1986,
as amended and in effect during the relevant period, and all Rule ref-
erences are to the Tax Court Rules of Practice and Procedure, unless oth-
erwise indicated.
  2 Such a structure does not work for Federal income tax purposes be-

cause a Roth IRA generally cannot be an eligible shareholder of an S cor-
poration. Taproot Admin. Servs., Inc. v. Commissioner, 133 T.C. 202, 215
(2009), aff ’d, 679 F.3d 1109 (9th Cir. 2012).
(157)               YARI v. COMMISSIONER                    159


corporation, this income was not taxed at the corporate level,
and because the shareholder was a nontaxable entity, the
income was not taxed at the shareholder level. The practical
effect of this transaction was twofold: it allowed petitioner to
effectively exceed the Roth IRA contribution limits and
decreased the amount of income petitioner otherwise would
have reported from Topaz Global because Topaz Global
deducted the amounts paid to Faryar as management fees.
   The Internal Revenue Service (IRS) has identified trans-
actions such as the one petitioner engaged in as abusive Roth
IRA transactions. Notice 2004–8, 2004–1 C.B. 333. The IRS
has also identified these transactions as listed transactions,
potentially subjecting taxpayers who did not disclose partici-
pation in these transactions on their Federal income tax
returns to penalties.
   Petitioner and his wife signed and apparently filed a joint
2004 Federal income tax return on October 17, 2005. This
return did not disclose petitioner’s participation in the Roth
IRA transaction. Respondent audited petitioner’s returns for
2002 and 2003 and, following his marriage in 2004, peti-
tioner and his wife’s returns for 2004 through 2007 and
issued notices of deficiency to petitioner for his 2002 and
2003 tax years and to petitioner and his wife for the 2004
through 2007 tax years. In these notices respondent deter-
mined that the management fee transactions were not valid
business transactions and should result in an excise tax
under section 4973. With respect to the 2004 tax year
respondent determined that petitioner and his wife should
have included in income $482,912 from the management fee
transaction. According to respondent’s calculations, this
inclusion, along with corresponding computational adjust-
ments, increased petitioner and his wife’s tax liability by
$135,215.
   Petitioner, his wife, and respondent settled these deficiency
cases and entered into a closing agreement in 2011. The
closing agreement required petitioner to include in his
income certain amounts for each of the tax years and pro-
vided that petitioner and his wife were not liable for the sec-
tion 4973 excise tax. The Court entered stipulated decisions
in the deficiency cases that reflected the parties’ closing
agreement.
160          143 UNITED STATES TAX COURT REPORTS                     (157)


   During the course of the audit petitioner determined that
he had made a substantial error on his 2004 tax return
because he incorrectly transferred information from a
Schedule K–1, Partner’s Share of Income, Deductions,
Credits, etc., to that return. Petitioner and his wife prepared
an amended return (first amended return) including $51 of
taxable interest, $482,912 of income as determined by
respondent, deductions of $1,270,448 claimed on Schedule E,
Supplemental Income and Loss, and $23,625 in itemized
deductions. The first amended return resulted in a negative
taxable income.
   Petitioner and his wife filed a second amended return for
the 2004 tax year during the pendency of the deficiency
cases. This second amended return claimed a net operating
loss carryback from the 2008 tax year of $2,856,026. On both
amended returns petitioner and his wife reported the
$482,912 from the management fee transaction as income.
The stipulated decision entered by the Court for the 2004 tax
year reflected the adjustments made in the first and second
amended 2004 tax returns.
   Respondent also assessed a section 6707A penalty of
$100,000 for the 2004 tax year based on his belief that peti-
tioner had failed to disclose his participation in a transaction
identified in Notice 2004–8, supra, as a listed transaction.
Respondent assessed this penalty on September 11, 2008.
   Respondent sent petitioner a final notice of intent to levy
on February 9, 2009. Petitioner timely requested a collection
due process (CDP) hearing. During the pendency of the
hearing, on September 27, 2010, Congress amended section
6707A to change the method of calculating the penalty. Small
Business Jobs Act of 2010 (SBJA), Pub. L. No. 111–240, sec.
2041(a), 124 Stat. at 2560. This change was effective retro-
actively for penalties assessed after December 31, 2006, id.
sec. 2041(b), and therefore the CDP hearing was suspended
in October 2010 so respondent could reconsider the calcula-
tion of the penalty. 3 Respondent’s revenue agent declined to
change the penalty, and petitioner requested review by the
IRS Appeals Office (Appeals), which also declined to modify
   3 The parties scarcely mention, much less substantively discuss, this

midhearing ‘‘time-out’’ and apparent referral to the IRS examination func-
tion. We therefore will not further comment on these events.
(157)               YARI v. COMMISSIONER                    161


the penalty. Petitioner did not request any collection alter-
natives during the CDP hearing, and counsel for petitioner
requested that the settlement officer issue a notice of deter-
mination. Consequently, the settlement officer complied and
issued the notice of determination sustaining the collection
action.
  Petitioner concedes that the Roth IRA transactions he
engaged in were listed transactions under Notice 2004–8,
supra, for the purposes of the section 6707A penalty. He
admits that he is liable for a penalty but challenges the cal-
culation of the penalty.

                          Discussion
I. Jurisdiction
   The parties assume we have jurisdiction over the penalty
issue in this case. But the Court has an independent obliga-
tion to determine whether it has jurisdiction over a case, and
the parties cannot simply stipulate jurisdiction or waive
jurisdictional defects. Arbaugh v. Y & H Corp., 546 U.S. 500,
514 (2006); Charlotte’s Office Boutique, Inc. v. Commissioner,
121 T.C. 89, 102 (2003), aff ’d, 425 F.3d 1203 (9th Cir. 2005).
Therefore, we begin our analysis with the jurisdictional ques-
tion.
   The Tax Court is a court of limited jurisdiction and may
exercise jurisdiction only to the extent authorized by Con-
gress. Adkison v. Commissioner, 592 F.3d 1050, 1052 (9th
Cir. 2010), aff ’g on other grounds 129 T.C. 97 (2007). But we
‘‘have jurisdiction to determine whether we have jurisdic-
tion.’’ Smith v. Commissioner, 133 T.C. 424, 426 (2009). In
Smith we also held that we did not have jurisdiction to
redetermine section 6707A penalties in a petition for redeter-
mination of a deficiency. Id. at 428–430. Because the section
6707A penalty did not fit the statutory definition of a defi-
ciency and because the Commissioner could assess and col-
lect the penalty without issuing a statutory notice of defi-
ciency, we lacked deficiency jurisdiction to redetermine the
penalty. Id. at 429. We noted, however, that ‘‘we would
presumably have jurisdiction to redetermine a liability chal-
lenge asserted by * * * [the taxpayers] in a collection due
process hearing.’’ Id. at 430 n.6. We now turn presumption
into conviction and aver our jurisdiction.
162        143 UNITED STATES TAX COURT REPORTS             (157)


   We begin by noting that section 6707A allows a taxpayer
to request the Commissioner to rescind all or part of the pen-
alty that is imposed because of a violation with respect to a
reportable transaction other than a listed transaction if
rescission would promote compliance with the Code and
effective tax administration. Sec. 6707A(d)(1). Congress
explicitly denied taxpayers the ability to seek judicial review
of the Commissioner’s rescission decision. Sec. 6707A(d)(2).
The provision prohibiting judicial review applies only to sub-
section (d) of section 6707A and does not otherwise preclude
our jurisdiction to review this penalty under section 6330.
See H.R. Rept. No. 108–548 (Part 1), at 262 n.233 (2004)
(stating that this provision contained in the American Jobs
Creation Act of 2004 (AJCA), Pub. L. No. 108–357, 118 Stat.
1418, ‘‘does not limit the ability of a taxpayer to challenge
whether a penalty is appropriate (e.g., a taxpayer may liti-
gate the issue of whether a transaction is a reportable trans-
action (and thus subject to the penalty if not disclosed) or not
a reportable transaction (and thus not subject to the pen-
alty))’’).
   Section 6330(d)(1) as amended by the Pension Protection
Act of 2006, Pub. L. No. 109–280, sec. 855(a), 120 Stat. at
1019, expanded the Court’s review of collection actions to
include collection actions where the underlying tax liability
consists of penalties not reviewable in a deficiency action. See
Williams v. Commissioner, 131 T.C. 54, 58 n.4 (2008);
Callahan v. Commissioner, 130 T.C. 44, 48 (2008). In a CDP
hearing a taxpayer may challenge ‘‘the existence or amount
of the underlying tax liability for any tax period if the person
did not receive any statutory notice of deficiency for such tax
liability or did not otherwise have an opportunity to dispute
such tax liability.’’ Sec. 6330(c)(2)(B). In his hearing peti-
tioner challenged the amount of the underlying tax liability
that resulted from the section 6707A penalty. See Callahan
v. Commissioner, 130 T.C. at 49 (‘‘We have interpreted the
phrase ‘underlying tax liability’ as including any amounts a
taxpayer owes pursuant to the tax laws that are the subject
of the Commissioner’s collection activities.’’). Petitioner has
not had an opportunity to dispute the amount of the penalty,
and consequently, we have jurisdiction to redetermine the
amount of the penalty.
(157)               YARI v. COMMISSIONER                    163


II. Standard of Review
   Ordinarily, our review of the determinations in a CDP
hearing is for abuse of discretion. Sego v. Commissioner, 114
T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176,
181–182 (2000). But when the underlying tax liability is
properly at issue, we review the determination de novo. Sego
v. Commissioner, 114 T.C. at 610; Goza v. Commissioner, 114
T.C. at 181–182. Petitioner challenges respondent’s deter-
mination as to the amount of the penalty, and thus, we
review that determination de novo.
III. Section 6707A Penalty
   Section 6707A(a) imposes a penalty on ‘‘[a]ny person who
fails to include on any return or statement any information
with respect to a reportable transaction which is required
under section 6011 to be included with such return or state-
ment’’. The amount of the penalty before the SBJA depended
on whether the transaction was a reportable transaction or
a listed transaction. Sec. 6707A(b) (2006), amended by SBJA
sec. 2041(a). For reportable transactions other than listed
transactions, it was $10,000 for natural persons and $50,000
for others, and for listed transactions, it was $100,000 for
natural persons and $200,000 for others. Id. The penalty
applied regardless of whether the listed or reportable trans-
action is respected for Federal income tax purposes. Peti-
tioner concedes he engaged in a listed transaction and that
he failed to properly disclose his participation.
   The penalty for failing to disclose a listed transaction on
a return after enactment of the SBJA is ‘‘75 percent of the
decrease in tax shown on the return as a result of such
transaction (or which would have resulted from such trans-
action if such transaction were respected for Federal [income]
tax purposes).’’ Sec. 6707A(b)(1). In the case of individuals,
the statute prescribes minimum and maximum penalties for
failing to disclose a listed transaction of $5,000 and $100,000,
respectively. Sec. 6707A(b)(2) and (3). The parties disagree as
to what return and what amount of tax we should use in cal-
culating the tax. Petitioner urges us to use the amended
returns to determine the decrease in tax, and respondent
says we must look to the original return. These disparate
positions stem from a fundamental disagreement as to what
164           143 UNITED STATES TAX COURT REPORTS                      (157)


the phrase ‘‘decrease in tax shown on the return as a result
of the transaction’’ means. To resolve this dispute, we must
examine and interpret the statute. 4
   The starting point for interpreting a statute is its plain
and ordinary meaning unless such an interpretation ‘‘would
produce absurd or unreasonable results’’. Union Carbide
Corp. v. Commissioner, 110 T.C. 375, 384 (1998). Undefined
words take their ‘‘ordinary, contemporary, common meaning.’’
Hewlett-Packard Co. & Consol. Subs. v. Commissioner, 139
T.C. 255, 264 (2012). We interpret statutes ‘‘ ‘in their context
and with a view to their place in the overall statutory
scheme.’ ’’ FDA v. Brown & Williamson Tobacco Corp., 529
U.S. 120, 133 (2000) (quoting Davis v. Mich. Dep’t of
Treasury, 489 U.S. 803, 809 (1989)). Where the statute is
clear and unambiguous, we need not resort to other tools of
statutory interpretation. BedRoc Ltd., LLC v. United States,
541 U.S. 176, 183 (2004). If the statute is silent or ambig-
uous, we may employ ‘‘ ‘traditional tools of statutory construc-
tion’ ’’, United States v. Home Concrete & Supply, LLC, 566
U.S. ll, ll, 132 S. Ct. 1836, 1844 (2012) (quoting
Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467
U.S. 837, 843 n.9 (1984)), including legislative history, to
ascertain congressional intent, Burlington N. R.R. Co. v.
Okla. Tax Comm’n, 481 U.S. 454, 461 (1987); Intermountain
Ins. Serv. of Vail, LLC v. Commissioner, 134 T.C. 211, 222–
223 (2010), rev’d, 650 F.3d 691 (D.C. Cir. 2011), vacated and
remanded, 566 U.S. ll, 132 S. Ct. 2120 (2012).
   Petitioner urges us to interpret the statute as calculating
the penalty using the tax savings produced by the listed
transactions. He says we should ignore the tax reported on
the return with respect to which he was required to report
the listed transaction. Instead, petitioner asks us to focus on
the returns prepared years after the reporting obligation
arose. He urges us to look at the plain language of the
statute, its place in the statutory scheme, and to the legisla-
tive history. Respondent, on the other hand, says that the
   4 The regulations are of no help here, as they merely parrot the statutory

language. Sec. 301.6707A–1(a), Proced. & Admin. Regs. The IRS released
these final regulations in 2011 with the explicit proviso that the regula-
tions ‘‘do not give further guidance on how the amount of the penalty is
computed’’ and stated that it intended to ‘‘provide guidance’’ at a ‘‘later
time.’’ T.D. 9550, 2011–47 I.R.B. 785, 786.
(157)                   YARI v. COMMISSIONER                             165


plain meaning of the statute does not support petitioner’s
position and urges us to compute the tax with reference only
to the tax shown on the original tax return. In his view, we
disregard the returns prepared during the audit, the mis-
takes on the prior return, and the correct tax owed by peti-
tioner when calculating the penalty. To be clear about the
stakes, if we adopt petitioner’s reading of the statute, the
penalty would be the statutory minimum, or $5,000; if we
hold for respondent, the penalty will stand as $100,000.
   We think the statute is clear and unambiguous: The pen-
alty is calculated with reference to the ‘‘tax shown on the
return’’. Sec. 6707A(b). When we look to the penalty provi-
sion as a whole, it is clear that Congress has penalized the
failure to disclose participation in a listed or otherwise
reportable transaction on the return or other information
statement giving rise to the disclosure obligation. If the tax-
payer fails to report the transaction on that return or
information statement, then the penalty is based on the tax
shown on that return or information statement, not some
other, later filed return or some hypothetical tax. Congress
did not say that the penalty should be calculated by ref-
erence to tax shown on a return; it did not say to calculate
the penalty using the tax required to be shown; and it did
not say to calculate the penalty using the decrease in tax
resulting from participation in the transaction. Congress very
clearly linked the penalty to the tax shown on a particular
return—the return giving rise to the reporting obligation.
Absent a ‘‘ ‘clearly expressed legislative intent to the con-
trary’ ’’, we will regard the clear and unambiguous language
of the statute as conclusive. 5 Reves v. Ernst & Young, 507
   5 We observe that the process of divining the legislative intent under-

lying a statute’s language and structure, while subject to canons of con-
struction and well-established methodologies, is hardly an exact science.
Compare, e.g., Halbig v. Burwell, 758 F.3d 390, 406–412 (D.C. Cir. 2014)
(having found sec. 36B unambiguous, concluding that weight of legislative
history, including overall congressional policy goals, did not override stat-
ute’s plain meaning, which was that tax credits were unavailable to par-
ticipants in health insurance exchanges established by the Federal Govern-
ment), rehearing en banc granted, vacated by ll F.3d ll, 2014 WL
4627181 (D.C. Cir. Sept. 4, 2014), with King v. Burwell, 759 F.3d 358, 371–
372 (4th Cir. 2014) (having found sec. 36B ambiguous, concluding that leg-
islative history did not support either plausible interpretation, and defer-
                                                Continued
166           143 UNITED STATES TAX COURT REPORTS                      (157)


U.S. 170, 177 (1993) (quoting United States v. Turkette, 452
U.S. 576, 580 (1981)). The plain meaning of the statute does
not support petitioner’s position.
   Petitioner also contends that the legislative history sup-
ports his position, but he fails to point to any actual legisla-
tive history. In any event, the documentary evidence ref-
erencing the penalty provision does not support petitioner’s
position. Congress initially enacted section 6707A with a flat
penalty of $100,000 for individuals with respect to listed
transactions. AJCA sec. 811(a), 118 Stat. at 1575. There was
no variable minimum and no variable maximum and no 75%
of tax savings calculation. Congress added the current cal-
culation as part of the SBJA, likely because of concern that
an inflexible penalty would create harsh results. See H.R.
Rept. No. 111–447, at 15 (2010).
   Unfortunately, no direct legislative history exists to
explain the change. What we do have is the rationale behind
an almost identical amendment included in a bill that never
became law. 6 H.R. 4849, 111th Cong., sec. 111 (2010). The
House passed H.R. 4849 partly out of concern for the poten-
tial inequities an inflexible penalty may create. H.R. Rept.
No. 111–447, supra at 15. Congress had heard from the
National Taxpayer Advocate that the potential magnitude of
the penalties had an overly harsh impact on individuals and
small businesses. Id. at 15–16. The tax advisers may not
have told these taxpayers of the reporting obligation, and the
penalties, for an individual conducting business through an
S corporation, could reach $300,000 per year for a listed
transaction that yielded little or no tax benefit. See National
Taxpayer Advocate, 2008 Annual Report to Congress (Vol.
One) 342–343, 419–421 (2008); see also sec. 6707A(b)(2)
(2004) (imposing a $200,000 penalty on nonindividual tax-
payers for failing to disclose a listed transaction).
   Transactions that span multiple tax years magnify the
effect as the reporting obligation exists for each return.
ring to agency’s determination that statute permitted tax credits for par-
ticipants in Federal health insurance exchanges, as consistent with overall
congressional policy goals).
   6 The only difference between the enacted and proposed amendments

was the inclusion in the proposed amendment to sec. 6707A(b)(2) of the ad-
ditional words ‘‘for any taxable year’’ between the words ‘‘transaction’’ and
‘‘shall not exceed’’.
(157)                  YARI v. COMMISSIONER                          167


National Taxpayer Advocate, 2008 Annual Report to Con-
gress (Vol. One), supra, at 420. The House Ways and Means
Committee explained that the new penalty calculation would
‘‘provide a mechanism for establishing a penalty amount that
will be proportionate to the misconduct to be penalized, with-
out discouraging compliance with the requirement to disclose
reportable transactions.’’ H.R. Rept. No. 111–447, supra at
16.
   Petitioner believes other legislative history inextricably
links the penalty calculation to the tax savings. He points to
the Joint Committee on Taxation’s general explanation, also
known as the Blue Book, to bolster his position. See Staff of
J. Comm. on Taxation, General Explanation of Tax Legisla-
tion Enacted in the 111th Congress 476–480 (J. Comm. Print
2011). The Joint Committee explained that Congress desired
to spare small businesses and individuals ‘‘unconscionable
hardship * * * as a result of the magnitude of the penalty’’
where the penalty ‘‘exceed[ed] the tax savings claimed on
these returns’’. Id. at 478. Contrary to petitioner’s position,
the Blue Books are not legislative history, though they can
sometimes be relevant if persuasive. United States v. Woods,
571 U.S. ll, ll, 134 S. Ct. 557, 568 (2013). In any event,
we remain unconvinced that the combined import of the Blue
Book and the earlier bill override our prior conclusions as to
the statute’s plain meaning.
   It is clear that in the earlier bill Congress intended to
blunt the effect of section 6707A for taxpayers who failed to
disclose a transaction but nonetheless did not benefit much
from that transaction. But it is equally clear that Congress
was concerned with the ‘‘tax reported on the participant’s
income tax return as a result of participation in the trans-
action’’, not the tax required to be shown. H.R. Rept. No.
111–447, supra at 16. It is also clear that what Congress
intended to penalize is the failure to disclose participation,
not the tax savings produced by the transaction. Id. at 15. 7
That Congress linked the penalty to the tax savings does not
change the fact that the culpable act here is the failure to
  7 See also Staff of J. Comm. on Taxation, General Explanation of Tax
Legislation Enacted in the 108th Congress 361 (J. Comm. Print 2005) (dis-
cussing the American Jobs Creation Act of 2004, Pub. L. No. 108–357, sec.
811, 118 Stat. at 1575, including ‘‘[r]easons for [c]hange’’).
168           143 UNITED STATES TAX COURT REPORTS                     (157)


disclose. Furthermore, the 2010 change linked the penalty
not to the tax savings calculated with the benefit of hindsight
but rather to the tax savings as claimed on the tax return.
In this vein, even the Blue Book fails to persuade as the
Joint Committee explained the change as aimed at
‘‘achiev[ing] proportionality between the penalty and the tax
savings that were the object of the transaction,’’ and not to
the actual tax saved. Staff of J. Comm. on Taxation, General
Explanation of Tax Legislation Enacted in the 111th Con-
gress, supra at 479.
   We note also section 6651(a)(2), which imposes an addition
to tax for failure ‘‘to pay the amount shown as tax on any
return specified [by parts of the Code]’’. At first glance, this
addition to tax would ignore the correct tax liability, and a
taxpayer who reported a tax greater than the actual tax due
would suffer. But section 6651(c)(2) ameliorates this poten-
tially harsh result by providing: ‘‘If the amount required to
be shown as tax on a return is less than the amount shown
as tax on such return, subsections (a)(2) and (b)(2) shall be
applied by substituting such lower amount.’’
   Congress obviously knows how to link a penalty or an
addition to tax to the tax required to be shown on the return
and has done so. Consequently, the fact that it did not do so
in section 6707A tends to bolster our holding that the pen-
alty applies to the amount shown on petitioner’s first filed
return. 8 See Marx v. Gen. Revenue Corp., 568 U.S. ll,
ll, 133 S. Ct. 1166, 1177 (2013) (declining to read into 15
U.S.C. sec. 1692k(a)(3) a limitation on the ability of courts to
award costs under rule 54 of the Federal Rules of Civil
Procedure in part because other ‘‘[s]tatutes confirm that Con-
gress knows how to limit a court’s discretion * * * when it
   8 We note that, here, petitioner amended his first filed return after the

date prescribed for filing a return for the 2004 tax year. We do not express
an opinion as to the result had he filed his first amended return before
that date. See Goldstone v. Commissioner, 65 T.C. 113, 116 (1975) (where
taxpayers sought to avoid a credit’s recapture in a later year by amending
the return on which the credit was claimed, holding that the Commissioner
was entitled to reject the amended return and recapture the credit in the
later year but observing that courts had upheld the validity of amended
returns in other circumstances, such as where the amended returns were
filed before the filing deadline for the subject tax year).
(157)                    YARI v. COMMISSIONER                              169


so desires’’). 9 Congress did not do so in section 6707A,
instead opting to impose the penalty as a percentage ‘‘of the
decrease in tax shown on the return as a result of such
transaction (or which would have resulted from such trans-
action if such transaction were respected for Federal tax pur-
poses).’’ Sec. 6707A(b)(1). Without a subsection analogous to
section 6651(c)(2), we calculate the penalty by reference to
the tax shown on the return and do not consider the amount
required to be shown.
   Section 6707A imposes a strict liability penalty. See H.R.
Rept. No. 111–447, supra at 13. While it may be harsh in
situations where a taxpayer mistakenly overstates his tax,
such is the result of the plain meaning of the statutory lan-
guage. 10 Legislative history does not indicate a clear
congressional intent to the contrary, and we therefore find
that the settlement officer did not err in the calculation of
the penalty.
   The Court has considered all of petitioner’s contentions,
argument, requests, and statements. To the extent not dis-
cussed herein, we conclude that they are moot, irrelevant, or
without merit. To reflect the foregoing,
                             Decision will be entered for respondent.

                              f



  9 We   note also that a net operating loss carryback from a subsequent tax
year does not reduce the tax required to be shown on the return for pur-
poses of calculating the sec. 6651(a)(2) addition to tax. See Vines v. Com-
missioner, T.C. Memo. 2009–267, slip op. at 15, aff ’d, 418 Fed. Appx. 900
(11th Cir. 2011).
   10 A court’s ‘‘obligation to avoid adopting statutory constructions with ab-

surd results is well-established’’ and can, in rare cases, override the literal
meaning of unambiguous statutory language. Halbig v. Burwell, 758 F.3d
at 402 (citing Public Citizen v. DOJ, 491 U.S. 440, 454–455 (1990)). See
generally John F. Manning, ‘‘The Absurdity Doctrine’’, 116 Harv. L. Rev.
2387 (2003). The statutory construction we adopt here does not, in peti-
tioner’s case, yield ‘‘ ‘an outcome so contrary to perceived social values that
Congress could not have intended it.’ ’’ See Halbig v. Burwell, 758 F.3d at
402 (quoting United States v. Cook, 594 F.3d 883, 891 (D.C. Cir. 2010)).
Different facts—such as, for example, a mere scrivener’s error in a decimal
place, resulting in tax shown on the return of 10 or even 100 times the
facially correct amount—might entail a different analysis.
