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Accuracy-related Penalty
FYE Deficiency Sec. 6662(a)1
7/29/90 $677,203 $135,441
7/28/91 650,359 130,072
8/02/92 499,789 99,958
1Respondent has conceded the accuracy-related penalty under
sec. 6662(a) for the years in issue.
After concessions, the sole issue for decision is whether
the amount of compensation paid by petitioner to its officers,
Daniel Bennett and Burton Sokol, was reasonable and thus
deductible as a business expense under section 162(a).1
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and second stipulation of facts are
incorporated herein by this reference.
Petitioner is a catalog wholesaler of fashionable women's
sportswear. Its principal place of business was in San Antonio,
Texas, at the time the petition was filed in this case.
Petitioner was incorporated on June 12, 1978, under the name
Unprinted T-Shirt Warehouse, Inc. Its name was changed to
Sunbelt Clothing Co. on January 25, 1991.
1Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the taxable years in
issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
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Last modified: May 25, 2011