- 13 -
See, e.g., John P. Scripps Newspapers v. Commissioner, 44 T.C. 453
(1965); W.L. Mead, Inc. v. Commissioner, T.C. Memo. 1975-215, affd.
551 F.2d 121 (6th Cir. 1977). We are satisfied that the amount
petitioner paid to the Guatemalan companies was a proper business
expense and not as part of a "cooperative-Guatemalan-U.S. venture"
between family members as respondent asserts.
To summarize, we do not sustain respondent's disallowance of
$2,952,091 from the total deductions claimed on petitioner's 1993
fiscal year income tax return.
Issue 2. Section 6662(a) Accuracy-Related Penalty
The next issue is whether petitioner is liable for the section
6662(a) accuracy-related penalty. Section 6662(a) imposes a
penalty in an amount equal to 20 percent of the portion of the
underpayment of tax attributable to one or more of the items set
forth in section 6662(b). Based upon our holding that no
understatement exists, we need not address this issue.4
To reflect the foregoing,
Decision will be entered
for petitioner.
4 Petitioner requested that it be awarded attorney fees
in its petition and briefs. For us to now consider such an
award, petitioner must comply with the requirements of Rule 231.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13
Last modified: May 25, 2011