- 4 - On June 13, 1991, respondent notified petitioner in writing that petitioner was under audit for fiscal years 1987, 1988, and 1989. On June 14, 1991, Saul sent petitioner an Information Document Request (IDR). In it, Saul noted that the only issue Saul was considering was the amortization of film rights for 1987 to 1990. The IDR led petitioner to believe that respondent would not pursue the section 531 issue. Saul did not consider asserting section 531 against petitioner then because he did not believe the section 531 issue was strong for respondent. Saul told Hochheiser that he leaned against pursuing the section 531 issue. However, after meeting with a reviewer in early August 1991, Saul concluded that respondent should assert the section 531 issue against petitioner on the assumption that Windsor had substantial liquidity and no plans to expand and because Hochheiser did not mention expansion plans after Saul briefly mentioned section 531. Saul did not ask petitioner's owners or Hochheiser about whether petitioner needed to accumulate earnings. Saul did not ask to see petitioner's board minutes. On August 19, 1991, Saul told Hochheiser that he would assert the section 531 issue because he believed petitioner had no reasonable needs to accumulate earnings and the 3-year period to assess tax was about to expire. On August 29, 1991, respondent issued notices to petitioner under section 534(b) proposing to assert accumulated earnings tax for each year in issue. On August 30, 1991, respondent issued a notice ofPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011