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Petitioners' corporation, Cost Less Auto Parts, Inc. (Cost
Less), paid $175,000 to a shareholder (Leonard Jasiak) to buy his
Cost Less stock. Around that time, Jasiak promised (for no
consideration) that he would not compete against Cost Less.
The issues for decision are:1
1. Whether the fact that Jasiak voluntarily promised not
to compete against Cost Less entitles Cost Less to amortize any
of its payment for Jasiak's stock. We hold that it does not.
2. Whether Cost Less has shown that a $10,000 reduction in
its ending inventory for each year in issue is necessary to
clearly reflect its income. We hold that it has not.
3. Whether Cost Less or petitioners may deduct expenses
for the business use of petitioners' vehicle or miscellaneous
expenses that petitioner paid on behalf of Cost Less. We hold
that they may not.
1 Petitioners concede that, if there are deficiencies in
income tax for 1988 and 1991, they are liable for the addition to
tax under to sec. 6651(a)(1) for those years.
Respondent determined that petitioners are liable for the
addition to tax for failure to pay estimated tax under sec. 6654
for 1988 and 1989. We lack jurisdiction to decide this issue if
petitioners filed income tax returns for years in which the
addition is asserted. See sec. 6665(b)(2); Meyer v.
Commissioner, 97 T.C. 555, 562 (1991); Fujita v. Commissioner,
T.C. Memo. 1999-164; Cherry v. Commissioner, T.C. Memo. 1998-360;
Reese v. Commissioner, T.C. Memo. 1997-346. Petitioners filed
income tax returns for those years. Thus, we lack jurisdiction
to decide whether petitioners are liable for the addition to tax
under sec. 6654 for 1988 and 1989. Sec. 6665(b)(2).
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