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about 30 percent of the sample reviewed. Respondent overlooked
the travel deduction for the FYE July 31, 1984, and made an
error with respect to the FYE July 31, 1983, travel adjustment.
Respondent's agent sampled or reviewed $65,298.85 of the
$170,147 deducted for travel. The review resulted in a 30-
percent disallowance rate, which the agent mistakenly applied
to the $65,298.85 sample rather than the $170,147 amount
claimed. For its FYE July 31, 1983 and 1984, Great deducted
interest expenses in the amounts of $60,101 and $40,474, and
respondent disallowed $56,516 and $28,800, respectively. The
majority of the disallowance was attributable to a transaction
involving Tipuani Limited Partners (Tipuani). Petitioners did
not show that interest was paid in connection with the Tipuani
transaction. The remainder of the claimed interest was
attributable to payments on debt secured by the company
airplane, which respondent allowed. Great had reported income
in connection with Tipuani, and respondent reduced the $212,000
reported to $125,000. The income was attributable to
forgiveness of indebtedness regarding promissory notes to
Tipuani.
For its FYE July 31, 1983, Great deducted $9,654 as bad
debts, and respondent disallowed $4,800 as already having been
deducted as professional fees, insurance, etc. For its FYE
July 31, 1983 and 1984, Great deducted $126,771 and $227,915
for airplane and pilot fees, and respondent disallowed $812 of
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