- 4 -
Unless otherwise indicated, 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.
STATEMENT OF ISSUES
After concessions,3 the issues remaining for decision are:
1. Whether petitioner Powertex, Inc., is entitled to deduct
certain royalty payments paid to certain individual petitioners, or
whether an adjustment under section 162 or section 482 is warranted;
2. whether consulting fees paid by Powertex, Inc., to Special
Commodities Services, Inc., are ordinary and necessary business
expenses deductible under section 162;
3. whether amounts deducted by Powertex, Inc., as management
fees paid to Powertex Plus International, Inc., are reasonable
payments for services rendered;
4. whether the individual petitioners received constructive
dividends;
2(...continued)
appropriate royalty rate pursuant to sec. 482 should be 0
percent. Correspondingly, respondent amended his answers to
increase the constructive dividends asserted against several of
the individual petitioners.
Respondent bears the burden of proof with respect to the
increased deficiencies, additions to tax, and penalties pleaded
in the amended answers. Rule 142(a). In light of our holdings
with regard to the issues raised in the amended answers, however,
the location of the burden of proof is immaterial.
3 Petitioners conceded several issues in the stipulations of
facts. Additionally, to the extent they did not address other
issues on brief, we consider such issues to have been conceded.
Rybak v. Commissioner, 91 T.C. 524, 566 n.19 (1988).
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