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Following concessions by petitioner, the issues remaining for
decision are: (1) Whether respondent properly reallocated to
petitioner $176,548 for its fiscal year ended March 31, 1991, and
$155,000 for its fiscal year ended March 31, 1992, from three of
its related entities pursuant to section 482; and (2) whether
petitioner is liable for the accuracy-related penalties pursuant to
section 6662(b)(2) for both of the aforementioned fiscal years.
All section references are to the Internal Revenue Code in
effect for the years at issue. All Rule references are to the Tax
Court Rules of Practice and Procedure.
FINDINGS OF FACT
Some of the facts have been stipulated and are found
accordingly. The stipulation of facts and the attached exhibits
are incorporated herein by this reference.
Kaps Warehouse, Inc.
Kaps Warehouse, Inc., an Idaho corporation, had its principal
place of business in Blackfoot, Idaho, at the time it filed its
petition. Petitioner reports its income on the basis of a fiscal
year ending March 31. It timely filed its corporate income tax
returns for its fiscal years ended March 31, 1991 (fiscal year
1991), and March 31, 1992 (fiscal year 1992).
Petitioner is a wholesaler of automotive parts and supplies.
It was originally founded by O. Reed Kirkham (presently retired) in
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