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John P. Parsons and Melba R. Parsons--Docket No. 20691-91
Additions to Tax
Tax Period Ended Deficiency Sec. 6661
12/31/87 $11,028 $2,757
12/31/88 8,095 2,024
Respondent subsequently conceded the additions to tax
pursuant to section 6661 in docket No. 20691-91 for the 1987 and
1988 taxable years in the amounts of $2,757 and $2,024,
respectively.
During the tax periods in issue, Guaranteed Rental Systems,
Inc. (Guaranteed), was an S corporation not subject to the
unified audit and litigation procedures of the Tax Equity and
Fiscal Responsibility Act of 1982 (TEFRA), Pub. L. 97-248, sec.
402(a), 96 Stat. 324, 648,3 and all of Guaranteed's adjustments
flowed directly through to the shareholders' tax returns and are
reflected in the deficiencies shown in docket Nos. 20690-91 and
20691-91. For the fiscal year ending May 31, 1987, ABC Rentals
of San Antonio, Inc. (ABC), was a C corporation, and the notice
of deficiency in docket No. 20689-91 relates to deficiencies
during that fiscal year only. Thereafter, ABC applied for and
3Sec. 6244 provides that the TEFRA provisions relating to
the assessment and determination of partnership items are
extended to the assessment and determination of subch. S items.
Sec. 301.6241-1T(c), Temporary Proced. & Admin. Regs., 52 Fed.
Reg. 3003 (Jan. 30, 1987), exempts small S corporations, defined
as corporations with 5 or fewer shareholders, from the unified
audit and litigation procedures for taxable years the due date of
the return of which is on or after Jan. 30, 1987.
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