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After concessions by the parties, the issues for decision
are:
(1) Whether George Stotis (petitioner) recognized a taxable
gain when he surrendered certain leasehold rights. We hold that
he did.
(2) Whether petitioner is liable for a penalty for fraud
pursuant to section 6663, or whether petitioners are liable for
a penalty pursuant to section 6662(a) for negligence or disregard
of rules or regulations for the taxable year 1989. We hold that
petitioner is liable for the penalty on a portion of the
underpayment, and petitioners are liable for the penalty on the
remaining portion of the underpayment.
(3) Whether petitioners are liable for penalties pursuant
to section 6662(a) for negligence or disregard of rules or
regulations for the taxable years 1990 and 1991. We hold that
they are.
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, unless otherwise
indicated.
FINDINGS OF FACT
Some of the facts are stipulated and are so found. We
incorporate by reference the stipulation of facts, supplemental
stipulation of facts, and attached exhibits.
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