California Marine Cleaning, Inc. - Page 8

                                          8                                           
          E.   Postpetition Conferences                                               
               Petitioner's case was assigned to an Appeals officer                   
          sometime after petitioner filed its petition.  Respondent's                 
          revenue agent Bruce Zaer (Zaer) met with petitioner's counsel on            
          May 15 and July 11, 1997, to discuss petitioner's case.  At the             
          July 11 meeting, petitioner's counsel told Zaer that petitioner             
          had erroneously reported earnings and profits on an accrual basis           
          rather than on a cash basis on its 1991 tax return.  As a result            
          of the error, petitioner erroneously included accounts receivable           
          of about $662,000 in accumulated earnings.  Petitioner reported             
          on its 1991 return that its accumulated earnings were $853,837,             
          while in fact they were only about $190,000.  Around July 17,               
          1997, petitioner's accountant prepared a corrected analysis of              
          petitioner's accumulated taxable income for FY 1986 to 1994.7  He           
          concluded that petitioner had accumulated taxable income of                 
          $340,611 for FY 1992, $501,955 for FY 1993, and $615,005 for FY             
          1994.  Respondent's Appeals officer reviewed the accountant's               
          analysis and agreed with it.  On August 14, 1997, respondent                
          conceded the accumulated earnings tax issue.                                
          F.   Settlement of the Case                                                 
               At the calendar call on September 15, 1997, the parties                
          announced that they had reached a basis of settlement.  The                 


               7 In his corrected analysis, petitioner's accountant                   
          concluded that petitioner's accumulated earnings for fiscal year            
          1991 were about $110,000.                                                   




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