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4. Whether petitioners are liable for the addition to tax
or penalty for negligence for 1988, 1989, and 1991. We hold that
they are not.
Section references are to the Internal Revenue Code as
amended. Unless otherwise specified, Rule references are to the
Tax Court Rules of Practice and Procedure. References to
petitioner are to John H. Miner.
I. FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
A. Petitioners
Petitioners are married and lived in Tucson, Arizona, when
they filed their petition in this case.
B. Cost Less Auto Parts, Inc.
1. Formation
Leonard Jasiak (Jasiak) and petitioner organized Cost Less
Auto Parts, Inc. (Cost Less), in 1974. Petitioners owned 50
percent of the stock, and Jasiak and his wife owned the other 50
percent2 from 1974 to the time Jasiak sold his shares to Cost
Less. Cost Less was an S corporation under section 1361 during
the years in issue.
2 At a date not stated in the record, Jasiak acquired his
wife's interest so that he owned a 50-percent interest in Cost
Less.
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