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franchise transactions petitioners entered into were bona fide so
that petitioners are entitled to deduct royalty payments, or
whether an adjustment under section 162 or 482 is warranted;
(3) whether amounts petitioners deducted as interest and
guarantee fees were associated with bona fide debt; (4) whether
amounts petitioners deducted as interest in section 351
transactions were associated with debt; (5) whether Medieval
Dinner & Tournament, Inc., is entitled to deduct $236,313 that it
paid Medieval Show, Inc., as a marketing fee; (6) whether
petitioners may claim as current deductions the costs associated
with New Jersey and California expansions; (7) whether some of
petitioners are liable for the additions to tax and penalties for
fraud, or in the alternative, negligence; (8) whether some of
petitioners are liable for the additions to tax for substantial
understatement of income tax liability and increased interest;
(9) whether some of petitioners are liable for withholding of tax
at the source for interest, debt guarantee, consulting and
management fees, royalty payments, and franchise fees; and
(10) whether Medieval Dinner & Tournament, Inc., is liable for
the section 6656 addition to tax for failure to deposit
withholding of tax. 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.
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Last modified: May 25, 2011