Group Administration Premium Services, Inc., et al. - Page 3

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          under section 6662(b)(1) for negligence or disregard of rules and           
          regulations; and (c) GAPS and JJM for additions to tax under                
          section 6655 for failure to pay estimated tax.                              
               We hold that: (1) GAPS and JJM are not entitled to any                 
          additional expense deductions; (2) the payments by GAPS and JJM             
          were corporate distributions--dividends to the extent of earnings           
          and profits, returns of capital to the extent of petitioner's               
          basis in his shares, and capital gains as to the remaining                  
          amounts; and (3) the respective petitioners are liable for the              
          additions to tax and penalty, in amounts to be determined by Rule           
          155 computations.                                                           


                                  FINDINGS OF FACT                                    
               The parties have stipulated some of the facts, and the                 
          stipulations of facts and attached exhibits are incorporated in             
          this opinion.  Petitioners Jerome J. and Joanne L. Mancuso                  
          resided in Glenview, Illinois, when they filed their petition in            
          this case.  GAPS and JJM maintained their principal places of               
          business in Arlington Heights, Illinois, when they filed their              
          petitions.  At all relevant times, petitioner was the sole                  
          shareholder and director and president of both GAPS and JJM,                
          which were accrual basis taxpayers.  Petitioner and Joanne L.               
          Mancuso are cash basis taxpayers.                                           
               Petitioner has been an insurance agent/broker since 1969.              
          Prior to 1986, petitioner conducted his insurance business as a             



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