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Accuracy-Related
Fiscal Year Ended Deficiency Penalty Sec. 6662(a)
March 31, 1991 $8,500 $1,700
March 31, 1992 34,000 6,800
Unless otherwise noted, all section references are to the
Internal Revenue Code in effect for the years in issue.
We must decide the following issues:
(1) Whether there was a valid covenant not to compete
between petitioner and Thomas Wagner, entitling petitioner to
amortization deductions for the cost of the covenant. We hold
that there was a valid covenant not to compete and that
petitioner is entitled to amortization deductions.
(2) Whether petitioner is liable for the accuracy-related
penalties as determined by respondent. We hold that petitioner
is not liable.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. We
incorporate by this reference the stipulation of facts, first
supplemental stipulation of facts, and attached exhibits.1 At
the time of filing the petition, petitioner was incorporated
under the laws of Delaware with its principal place of business
in Houston, Texas.
1 At trial, respondent withdrew hearsay objections to
several of the exhibits attached to the stipulations.
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