- 2 -
allegations contained in the petitions regarding: (1) The impact
(if any) of the underlying adjustments on shareholder basis and
(2) the accuracy-related penalty under section 6662(a).1 As
explained in detail below, we shall grant respondent's motions in
part by striking: (1) All allegations in the petitions regarding
the specific amounts of the individual shareholders' bases in
their stock and (2) all allegations pertaining to the accuracy-
related penalties under section 6662(a). However, we shall deny
respondent's motions in respect of the allegations in the
petitions that the underlying adjustments in these cases, if
sustained, generally will result (as a matter of law) in bases
adjustments at the shareholder level.
Background
Allen's Hatchery, Inc. (Hatchery), an S corporation
organized under the laws of Delaware, is in the business of
hatching and raising live broiler chickens for resale to chicken
processors. Allen Family Foods, Inc. (Foods), an S corporation
also organized under the laws of Delaware, is in the business of
processing broiler chickens for sale to food retailers.
Hatchery and Foods are considered brother-sister corporations
insofar as they have the same controlling shareholders.
1 Unless otherwise indicated, all section references are to
sections of the Internal Revenue Code, as amended, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011