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Additions to tax
FYE Sec. Sec. Sec.
Mar. 312 Deficiency 6653(a)(1)(A) 6653(a)(1)(B) 6653(a)
1987 $372,401 $18,620 * --
1988 674,386 33,719 * --
1989 246,286 -- $12,314
* 50 percent of the interest due on the deficiency.
After concessions, we must decide:
(1) Whether petitioner is liable for the accumulated
earnings tax imposed by section 5313 for fiscal years 1987, 1988,
and 1989. We hold that it is not.
(2) Whether petitioner is liable for additions to tax for
negligence.4 We hold that it is to the extent discussed below.
Table of Contents
I. Findings of Fact Page
A. Petitioner and the Gustafson Family ........... 3
1. Petitioner ..................... 3
2. The Gustafson Family ................ 4
3. Officers and Stock Ownership ............ 4
4. Stock Purchase Agreement .............. 5
5. Repayment of Debt Owed to Shareholder ........ 6
B. Dairy Operations ..................... 7
1. Milk Production and Processing ........... 7
2 Petitioner's 1987, 1988, and 1989 fiscal years ended on
March 31.
3 Unless otherwise indicated, section references are to the
Internal Revenue Code. Rule references are to the Tax Court
Rules of Practice and Procedure.
4 For fiscal year 1988, respondent determined that
petitioner was liable for the environmental tax under sec. 59A in
the amount of $1,177. Petitioner offered no evidence or argument
relating to this issue. Respondent contends that it is merely
computational. We leave resolution of the amount petitioner owes
to the Rule 155 computations.
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