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Additions to tax
Sec. Sec. Sec.
FY1 Deficiency 6653(b)(1)(A)2 6653(b)(1)(B) 6661
1987 $116,223 $87,167 3 $29,056
1988 86,303 64,727 -- 21,576
1 Petitioner's 1987 fiscal year ended on May 31, 1988, and its
1988 fiscal year ended on May 31, 1989.
2 Section 6653(b)(1) for fiscal year 1988.
3 Fifty percent of the interest due on $116,223.
The issues for decision are:
1. Whether respondent's evidence (i.e., certain of
petitioner's business records) is inadmissible because of
petitioner's contention that it was obtained from an illegal
search and seizure. We hold that the evidence is admissible.
2. Whether petitioner had unreported income from its
medical practice of $338,317 for fiscal year 1987 and $259,951
for fiscal year 1988. We hold that it did.
3. Whether petitioner had unreported interest income of
$990 for fiscal year 1987 and $5,189 for fiscal year 1988. We
hold that it did.
4. Whether petitioner may carry forward a net operating
loss of $2,341 for fiscal year 1988. We hold that it may not.
5. Whether petitioner is liable for fraud under section
6653(b) for fiscal years 1987 and 1988. We hold that it is.
6. Whether petitioner is liable for additions to tax for
substantial understatement of income tax under section 6661 for
fiscal years 1987 and 1988. We hold that it is.
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