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Respondent determined deficiencies in and additions to
InverWorld Holdings, Inc.'s (Holdings) Federal income tax as
follows:
InverWorld Holdings, Inc., Docket No. 3442-93
Additions to Tax
Tax Year Sec. Sec. Sec.
Ended Deficiency 6653(a)(1)(A) 6653(a)(1)(B) 6661
June 30, 1987 $454,333 $22,717 1 $113,471
June 30, 1988 365,507 18,275 1 91,377
1 50 percent of the interest due on the deficiency.
Additions to Tax
Tax Year Sec. Sec. Sec.
Ended Deficiency 6653(a)(1) 6653(a)(2) 6661
June 30, 1989 1,453,333 72,667 --- 363,333
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
I. STATEMENT OF ISSUES
The issues for decision are:
A. Issues With Respect to LTD
1. Whether LTD is engaged in trade or business within the
United States pursuant to section 864(b) for its taxable years
ended June 30, 1985 through 1989;3
3
LTD’s deficiencies in income tax for its taxable years ended
June 30, 1984, 1985, and 1986, are not at issue in the instant
case. See supra note 2. We must, however, decide whether LTD
was engaged in trade or business pursuant to sec. 864(b) for its
taxable years ended June 30, 1985, and 1986, in order to apply
the dividend source rules. See infra p. 174.
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Last modified: May 25, 2011