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Accuracy-Related Penalty
Year Deficiency Sec. 6662(a)1
1990 $9,743 $1,949
1991 7,289 808
1992 26,951 5,390
The issues for decision are: (1) Whether petitioner's
S corporation is entitled to deduct lease payments for the use of
petitioner's boats; (2) if the answer to the foregoing is in the
negative, whether the petitioner may exclude a portion of those
lease payments from income; and (3) whether petitioner is subject
to the accuracy-related penalties for negligence.
FINDINGS OF FACT2
Petitioner resided in San Francisco, California, at the time
the petition herein was filed. For the years in issue,
petitioner was the sole shareholder of an S corporation named
Patrick E. Catalano, a Professional Law Corporation.
Petitioner's corporation maintained law offices both in San
Francisco and in San Diego, California. Petitioner’s clients
were primarily from San Francisco, the adjacent Marin County
area, or the San Diego area.
1 Unless otherwise indicated, 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.
2 Some of the facts have been stipulated and are so found.
The stipulation of facts and attached exhibits are incorporated
herein by this reference.
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