- 2 -
Held: R complied with the notice and comment
requirements of the APA, id., when R prescribed sec.
1.469-4(a), Income Tax Regs., and neither that section
nor sec. 1.469-2(f)(6), Income Tax Regs., is invalid
due to a lack of compliance with those requirements.
Jay B. Kelly, for petitioners.
Blaine C. Holiday, for respondent.
LARO, Judge: Petitioners petitioned the Court to
redetermine respondent's determination of an $11,869 deficiency
in their 1994 Federal income tax and a $2,374 accuracy-related
penalty under section 6662(a). Following concessions by
petitioners, the primary issue left to be decided is whether
sections 1.469-2(f)(6) and 1.469-4(a), Income Tax Regs., are
valid as applied to recharacterize the rental income of an
individual who rents property to a personal service corporation
for use in a business in which the individual materially
participates. We hold they are. We also decide whether
petitioners are liable for the accuracy-related penalty
determined by respondent. We hold they are not. Unless
otherwise indicated, section references are to the Internal
Revenue Code in effect for the subject year. Rule references are
to the Tax Court Rules of Practice and Procedure. Dollar amounts
are rounded to the nearest dollar.
FINDINGS OF FACT
Some facts have been stipulated. The stipulations of fact
and the exhibits submitted therewith are incorporated herein by
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