John Franklin Foust - Page 3

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          income tax return and the section 6662 accuracy-related penalty.            
          We sustain respondent’s determination on each contested issue.              
                                  FINDINGS OF FACT                                    
          Background                                                                  
               Most of the facts have been stipulated and are so found.               
          The stipulation of facts and attached exhibits are incorporated             
          by this reference.                                                          
               At the time of filing the petition in this case, petitioner            
          was a resident of Lemmon, South Dakota.  Petitioner was married             
          during the entire year 1989, the year at issue in this case, to             
          Mary S. Foust (Mrs. Foust).  On October 16, 1990, petitioner                
          filed a separate individual Federal income tax return for 1989              
          with the Internal Revenue Service Center at Kansas City,                    
          Missouri, showing zero taxable income and no tax liability.                 
          Pursuant to applications for extension, petitioner had until                
          October 15, 1990, to file his return.                                       
               Petitioner was a practicing Iowa certified public accountant           
          from 1971 until 1976 and from 1989 through the time of trial.               
          Petitioner holds a law degree from Drake University, but has not            
          been admitted to practice law in any jurisdiction.                          
          Petitioner’s Farming-Related Activities                                     
               On February 22, 1985, petitioner incorporated Cheyenne; he             
          acquired all its shares and caused it to become an S corporation.           
          Petitioner organized Cheyenne for the purpose of farming, by                





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