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Kelso in the form of roofing services Kelso provided to Badell in
B&W’s 1995 fiscal year. We hold that it did.
2. Whether B&W may deduct costs it advanced on behalf of
its clients of $24,680 for fiscal year 1995 and $37,799 for
fiscal year 1996. We hold that it may not.
3. Whether petitioners Patrick Badell and Lillian Badell
(the Badells) and petitioners Ronald Wilson and Donna Wilson (the
Wilsons) are liable for the accuracy-related penalty for
negligence under section 6662(a) for 1994, 1995, and 1996. We
hold that they are.
Section references are to the Internal Revenue Code in
effect during the years in issue. Rule references are to the Tax
Court Rules of Practice and Procedure. References to Badell and
Wilson are to Patrick Badell and Ronald Wilson, respectively.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
A. Petitioners
The Badells lived in Indianapolis, Indiana, when they filed
their petition. The Wilsons lived in Rushville, Indiana, when
they filed their petition.
B. Badell & Wilson, P.C.
Badell and Wilson are attorneys. They each own 50 percent
of the stock of B&W, an S corporation incorporated on June 3,
1982. B&W’s office is located in Rushville. Badell was B&W’s
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