T.C. Memo. 1996-168
UNITED STATES TAX COURT
NORTHWESTERN INDIANA TELEPHONE COMPANY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
ROBERT G. MUSSMAN AND MYRTIS MUSSMAN, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent1
Docket Nos. 7970-91, 7971-91. Filed April 2, 1996.
R determined that NITCO, a local telephone
company, unreasonably accumulated its earnings and
profits and, therefore, was subject to accumulated
earnings tax. R further disallowed business deductions
NITCO claimed for legal expenses and determined that
NITCO was liable for certain additions to tax.
R determined that M, NITCO’s president and major
shareholder, had constructive dividend income and that
M and M’s wife were liable for certain additions to
tax.
1. Held: NITCO is liable for accumulated
earnings tax because its accumulated earnings exceeded
its reasonable business needs and NITCO was availed of
1This Court granted petitioners' motion to consolidate.
Page: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011