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Additions to Tax or Penalties
Sec. Sec. Sec. Sec. Sec. Sec. Sec.
FYE Deficiency 6651(a)(1) 6651(a)(2) 6653(a)(1) 6661(a) 6662(a) 6662(d) 6662(e)
6/30/89 $1,200,812 $300,203 -- $60,041 $300,203 -- -- --
6/30/90 1,976,911 494,228 -- -- -- -- $268,434 $253,897
6/30/91 1,741,876 435,469 -- -- -- -- 206,786 283,178
6/30/92 741,723 33,730 $3,748 -- -- $149,911 -- --
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the taxable years in
issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
After concessions,1 the issue for decision is whether the
commission fees petitioner received from certain related entities
constituted arm's-length charges for the services rendered. We
hold that petitioner did not receive an arm's-length commission
rate and that the commission rate should be adjusted as stated
herein.
FINDINGS OF FACT
Some facts have been stipulated and are so found. The
stipulation of facts, supplemental stipulation of facts, and
attached exhibits are incorporated herein by this reference.
When it filed its petitions, petitioner had its principal office
in Nogales, Arizona.
Petitioner, an Arizona corporation, is in the business of
distributing and marketing in the United States fresh produce
grown mostly in Mexico. Petitioner files its Federal corporate
1See appendix.
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Last modified: May 25, 2011