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(6) Whether the Takaos are liable for an addition to tax
for substantial underpayment of tax under section 6661 for 1988.
We hold that they are.
Toraya Corporation(docket No. 19181-94) After
concessions,4 the following issues remain in dispute: (1)
4 In a stipulation of settled issues filed Dec. 4, 1995,
and an amended stipulation of settled issues filed May 14, 1996,
the parties agreed as follows:
1. Respondent concedes that adjustments for "Purchase
Expense" should be decreased as follows:
1988 $30,733
1989 5,114
1990 25,230
1991 24,000
Respondent also concedes that Toraya is entitled to an additional
$6,000 purchase expense in 1990.
2. Respondent concedes adjustments for "Amortization
Expense" for all years in issue.
3. Respondent and Toraya agree that adjustments for
"Business Travel" are settled by reducing the amounts shown as
follows:
1988 $8,931
1990 4,400
1991 3,606
4. Respondent and Toraya agree that adjustments for "Truck
Expense" for all years in issue are settled by reducing the
amounts as follows:
1988 $13,000
1989 4,123
1990 3,936
1991 2,009
5. Toraya concedes that the adjustment for "Employee
Meeting Expense" for 1988 in the amount of $6,455 is correct.
6. Respondent concedes that the adjustment for "Office
Expenses" for 1988 should be reduced by $1,800. The remaining
amounts for the years in issue under this adjustment remain in
dispute.
7. Respondent concedes adjustments entitled "Restaurant
Expenses" for 1988 and 1989.
8. Respondent concedes the adjustment for "Rent Expenses"
for 1988.
9. Respondent concedes adjustments entitled "Depreciation
Expenses -- Auto" and "Depreciation Expenses -- Other" for all
(continued...)
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