California Marine Cleaning, Inc. - Page 4

                                          4                                           
                               FY 1992        FY 1993        FY 1994                  
          Gross receipts      $2,839,130     $2,905,192     $2,822,943                
          Compensation of     165,223        272,000        269,000                   
          officers                                                                    
          Salaries and wages  1,086,926      991,749        1,018,735                 
          Repairs             26,605         26,459         15,651                    
          Rents               59,338         32,807         33,336                    
          Taxes               152,664        139,273        137,015                   
          Interest                 5,179          2,605          3,286                
          Contributions            4,325          7,745          9,591                
          Depreciation        75,988         63,943         54,550                    
          Pensions, profit-                  172,804        88,663                    
          sharing plans                                                               
          Other deductions1   995,464        976,003        1,050,076                 
          Unappropriated      1,149,031      1,230,404      1,197,598                 
          retained earnings                                                           
               1 Petitioner's other deductions included expenses for                  
          subcontractors, materials and supplies, equipment rental,                   
          chemical analysis, waste disposal, trucks, insurance, travel,               
          office, legal and accounting services, permits, telephone, and              
          utilities.                                                                  
               Petitioner paid no dividends and had no inventory in fiscal            
          years 1992, 1993, and 1994.                                                 
          C.   The Audit and Respondent's Determination                               
               In 1995, respondent audited petitioner's 1992, 1993, and               
          1994 fiscal years (FY).  The record does not indicate who                   
          respondent talked to or what documents respondent saw during the            
          audit.                                                                      
               On May 15, 1996, respondent notified petitioner, pursuant to           
          section 534(b), that respondent intended to issue a notice of               
          deficiency determining that petitioner is liable for the                    
          accumulated earnings tax under section 531 for FY 1992, 1993, and           
          1994.  Petitioner had 60 days to file a section 534(c) statement.           
          Sec. 534(c); sec. 1.534-2(d)(2), Income Tax Regs.  On June 13,              




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011