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All section references are to the Internal Revenue Code in effect
for the years in issue, and all Rule references are to the Tax
Court Rules of Practice and Procedure, unless otherwise
indicated.
After concessions,1 the issues for decision are:
(1) The amount petitioner is entitled to deduct under
section 162 as reasonable compensation to its president Lon
Martin for its year ended June 30, 1990. We find it is entitled
to deduct $406,000.
(2) Whether petitioner is liable for an accuracy-related
penalty under section 6662(a) and (b)(2) for the year ended June
30, 1990, with respect to its claimed deduction for the
compensation to Lon Martin. We hold that it is not liable for
the penalty.
FINDINGS OF FACT
Some of the facts and certain documents have been stipulated
for trial pursuant to Rule 91 and are found accordingly. We
incorporate the parties' stipulations in this opinion by
reference.
Petitioner is an Oregon corporation. When its petition
herein was filed, petitioner maintained its principal office in
Portland, Oregon.
1Among other things, respondent concedes that petitioner is
not liable for an addition to tax under sec. 6661 for its year
ended June 30, 1987.
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