Willliam N. and Beth Ann Katsaros - Page 7




                                        - 7 -                                         

          of $4,000 is the pretax value.  After the income tax is deducted,           
          the $4,000 would be reduced and would come closer to matching the           
          distributions received by petitioner and treated as tax-free loan           
          proceeds.  Furthermore, the minutes are not dated and are not               
          signed by petitioner, who claims he prepared the minutes after              
          the meeting.  Rather, the minutes allegedly contain the signature           
          of his father (who did not appear at trial), who bears the same             
          name as petitioner.  Thus, even if we were to admit the document,           
          we would give it little weight.  Accordingly, we find that the              
          $27,700 in distributions is includable in petitioners' income               
          under section 61(a)(1) as compensation for services.                        
               We also find that petitioners are liable for the accuracy-             
          related penalty under section 6662(b)(1) as stated in the notice            
          of deficiency.  Petitioners did not produce any evidence                    
          regarding the penalty, and the record does not indicate that the            
          penalty has been conceded by respondent.                                    
               To reflect the foregoing,                                              
                                             Decision will be entered                 
                                        under Rule 155.                               














Page:  Previous  1  2  3  4  5  6  7  

Last modified: May 25, 2011