Edward Clasby and C.T. Garrahan Insurance Agency, Inc. - Page 2




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          1985      32,156         -0-            7,235          8,039                
          1986      33,288         -0-            7,490          8,322                
          1987      34,355         -0-             7,730         8,589                
          1988      35,374         -0-            7,959          8,844                
          1989      35,374         -0-            7,959          8,844                
          1990      35,374         -0-            7,959          6,721                
          1991      35,374         -0-            7,959          4,599                
          1992      35,374         -0-            7,959        2,476                  
          1993      21,624    $707,488        65,620             7,291                
               After concessions, the issues for decision are:                        
               1.   Whether petitioners are disqualified persons as                   
          described in section 4975(e)(2).  We hold that they are, and that           
          they are jointly and severally liable for the 5-percent excise              
          tax on prohibited transactions under section 4975(a) for 1982 to            
          1993.                                                                       
               2.   Whether petitioners are liable for additions to tax               
          under section 6651(a)(1) for 1982 to 1993.  We hold that they are           
          to the extent discussed below.                                              
               At trial, respondent conceded that petitioners are not                 
          liable for the 100-percent excise tax under section 4975(b) for             
          1993 or the additions to tax under section 6651(a)(2) for 1982 to           
          1993.  Respondent also conceded that the addition to tax under              
          section 6651(a)(1) for 1993 does not exceed $7,959.                         
               References to petitioner are to Edward Clasby.  References             
          to the Garrahan Agency are to the C.T. Garrahan Insurance Agency,           
          Inc.  Section references are to the Internal Revenue Code in                
          effect for the years in issue.  Rule references are to the Tax              
          Court Rules of Practice and Procedure.                                      
                                I.  FINDINGS OF FACT                                  
               Some of the facts have been stipulated and are so found.               

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