M.S. Food Stores, Inc. - Page 31

                                       - 31 -                                         
          158, 173 (1978).  We sustain respondent's determination that the            
          corporate petitioner was negligent with respect to its                      
          underpayments.                                                              
               Addition to Tax under Section 6661                                     
               Respondent has determined an addition to tax under section             
          6661 for substantial understatement of tax for the corporate                
          petitioner's taxable year ended September 30, 1988.  This                   
          addition applies when the understatement of income tax of a                 
          corporate taxpayer exceeds the greater of (1) 10 percent of the             
          tax required to be shown on the return for the taxable year, or             
          (2) $10,000.  Sec. 6661(b)(1).  The understatement for purposes             
          of this addition shall be reduced where there is substantial                
          authority for the tax treatment of any item or if there was                 
          adequate disclosure, in or attached to the return, of the                   
          relevant facts affecting any item.  Sec. 6661(b)(2)(B).                     
               The corporate petitioner has presented no argument in                  
          objection to this addition.  Since the amount of the                        
          understatement for the taxable year ended September 30, 1988, is            
          substantial, we sustain respondent's determination on this issue.           
          The Suttons                                                                 
               Rebate and Coupon Checks                                               
               Respondent contends that Mr. Sutton diverted the proceeds of           
          the cashed rebate and coupon checks from the corporate petitioner,          
          thereby receiving constructive dividends.  Petitioners allege that          






Page:  Previous  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  33  34  35  36  37  Next

Last modified: May 25, 2011