Loren F. Paullus and Donna Paullus - Page 1

                                 T.C. Memo. 1996-419                                  


                               UNITED STATES TAX COURT                                

                 LOREN F. PAULLUS AND DONNA PAULLUS, Petitioners v.                   
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      
                        RIDGEMARK CORPORATION, Petitioner v.                          
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket Nos. 6105-93, 6106-93.    Filed September 17, 1996.             


               Clarence J. Ferrari, Jr., George P. Mulcaire, J. Timothy               
          Maximoff, and C. David Spence, for petitioners.                             
               Christopher J. Faiferlick and Barbara M. Leonard, for                  
          respondent.                                                                 


                       MEMORANDUM FINDINGS OF FACT AND OPINION                        
               GERBER, Judge:  Respondent determined a deficiency in                  
          petitioners Loren F. Paullus and Donna Paullus’ 1989 Federal                
          income tax in the amount of $124,324 and a penalty under section            






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