- 12 -
minutes of EIC's 1990 and 1991 annual board of director's meet-
ings reflect the board's formal approval and ratification of the
corporation's borrowing money from, and loaning money to, peti-
tioner and Mrs. Wang.
The Notices of Deficiency
Initially, EIC's 1989 corporate income tax return was
selected for audit. The revenue agent first contacted EIC
personnel in December 1992. After the revenue agent reviewed
some of the information obtained from the initial document
request and identified EIC's accounting method as a potential
issue, the examination was expanded to include the years 1990 and
1991 for EIC, as well as the Wangs' personal Federal income tax
returns for 1989 through 1991. Some time later, EIC's 1992
corporate tax return was also opened for examination.
By 1994, the revenue agent had identified a large number of
potential issues in EIC's corporate tax returns and the Wang's
individual returns. However, the various statutory periods of
limitations were near their expiration dates, and petitioners
refused to grant extensions to respondent. Consequently, at
different times from February 1994 through February 1995,
respondent issued a statutory notice of deficiency for each year
under audit. As a result, the notices of deficiency contained
numerous items that could have been resolved in the examination.
For instance, the notice of deficiency relating to EIC's 1990 tax
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011