- 2 -
Additions to Tax and Penalties
Sec. Sec. Sec.
Year Deficiency 6653(a)(1)(A) 6653(a)(1)(B)* 6662(a)**
1987 $5,766 $288 50% of the -–
interest due
on $4,446
1988 4,272 214 -– -–
1989 14,766 -– -– $2,477
* Sec. 6653(a)(1)(B) was repealed for 1988.
** Sec. 6662(a) was enacted in 1989, generally
effective for returns the due date for which is after
Dec. 31, 1989.
The issues for decision are:
1. Whether Hillside Farm Co. (Hillside Farm), a putative
business trust established by petitioners, should be disregarded for
Federal income tax purposes because it lacks economic substance.
We hold that it should.
2. Whether petitioners are liable for additions to tax for
negligence pursuant to section 6653(a), for taxable years 1987 and
1988, and an accuracy-related penalty pursuant to section 6662(a)
for taxable year 1989.1 We hold that they are.
FINDINGS OF FACT
The parties have stipulated some of the facts, which are so
found. The stipulated facts and associated exhibits are
incorporated by this reference.
1 All section references are to the Internal Revenue Code in
effect for the years in issue. All Rule references are to the
Tax Court Rules of Practice and Procedure.
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Last modified: May 25, 2011