Ellwest Stereo Theatres of Memphis, Inc., et al. - Page 2

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                         Over several years Ps made payments to related                                    
                  foreign corporations without reporting the payments on                                   
                  Forms 1042 or withholding and paying the tax due.  Ps                                    
                  sought to avoid additions to tax under secs.                                             
                  6651(a)(1), 6656(a) and 6653(a), I.R.C., on the                                          
                  grounds, inter alia, that the governing law was                                          
                  complex, that they relied on accountants and counsel,                                    
                  and that they cooperated fully with R as soon as they                                    
                  discovered their mistake.  Held:  The additions are                                      

                  Robert E. Miller and Edith S. Thomas, for petitioners.                                   
                  Alexandra E. Nicholaides and Eric R. Skinner, for                                        

                            MEMORANDUM FINDINGS OF FACT AND OPINION                                        

                  LARO, Judge:  These cases were consolidated for purposes of                              
            trial, briefing, and opinion pursuant to Rule 141(a).2                                         
            Petitioners sought redetermination of deficiencies and additions                               
            to tax determined by respondent as follows:                                                    
        Ellwest Stereo Theatres of Memphis, Inc., docket No. 3891-94                                       
                                        Additions to Tax                                                   
                                        Sec.        Sec.               Sec.         Sec.                   
        Year         Deficiency         6651(a)(1)   6653(a)(1)        6653(a)(2)   6656                   
        1985         $7,950             $1,988      $398               $4,306       $795                   

                  2 All Rule references are to the Tax Court Rules of Practice                             
            and Procedure and, unless otherwise indicated, all section                                     
            references are to the Internal Revenue Code in effect for the                                  
            years at issue.                                                                                

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