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section 6653(a)(1); and for accuracy-related penalties for
negligence for the taxable years 1989 and 1990 under section
6662(a); and
(10) whether the Suttons are liable for additions to tax for
the taxable years 1986, 1987, and 1988 under section 6661.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts, the supplemental stipulation of facts,
and the exhibits attached thereto are incorporated herein by this
reference.
The corporate petitioner had its principal place of business
in Kinston, North Carolina, at the time it filed its petition.
The Suttons resided in Kinston, North Carolina, at the time they
filed their petition. The cases have been consolidated for
trial, briefing, and opinion.
The corporate petitioner operated a retail grocery store in
Kinston, North Carolina, during the years at issue. Petitioner
Frederick Malcolm Sutton (Mr. Sutton) owned 100 percent of the
stock of the corporate petitioner. Previously, his father,
Frederick Sutton (Fred Sutton), had owned and operated the
grocery business. Mr. Sutton began working with his father at
the store when he was approximately 11 years old.
Mr. Sutton is a high school graduate and took some community
college courses in grocery management and butchering and meat
cutting. Mr. Sutton has no education or training in accounting,
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