6 percent of Sealy, Inc. In December 1986, Sealy Mattress Co. bought 4.37 percent of Sealy, Inc. from individual shareholders. Thereafter, the Ohio Mattress Co. indirectly owned 81.86 percent of Sealy, Inc.’s voting stock. On September 15, 1987, petitioners timely elected to treat the stock purchases (except Sealy, Inc., and Sealy of Michigan) as asset acquisitions under section 338. E. Petitioners’ IRS Audits The Internal Revenue Service (IRS) audited petitioners’ tax returns for the years ending November 30, 1987, November 30, 1988, April 24, 1989, November 30, 1989, November 30, 1990, November 30, 1991, and November 30, 1992. The IRS examined petitioners’ books, records, and tax filings relating to the acquisitions. Petitioners paid Ernst & Young, American Appraisal Associates, and other accounting and law firms for services relating to the 1991 and 1992 IRS audits of petitioners’ 1987, 1988, and 1989 tax years. Most of petitioners’ IRS examination expenses related to the IRS audit of the acquisitions, the section 338 elections, and petitioners’ return for the tax year ending November 30, 1987. Petitioners paid $567,974 in 1991 and 1992 for accounting and legal services relating to IRS audits of petitioners’ 1987 tax year. Petitioners incurred the expenses to comply withPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011