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Penalties
Year Deficiency Sec. 6662(a)1 Sec. 6663(a)
1989 $522,221 $104,444 $391,666
1990 334,663 66,933 250,997
1991 109,047 21,809 81,785
1992 103,224 20,645 77,418
1 The sec. 6662(a) accuracy-related penalties were determined
as an alternative to the sec. 6663(a) fraud penalties.
Subsequently, by an amendment to answer, respondent asserted
increased deficiencies and penalties for 1989 and 1991, as follows:
Penalties
Year Deficiency Sec. 6662(a) Sec. 6663(a)
1989 $877,054 1 $657,791
1991 153,214 1 114,911
1 20 percent of the underpayment to which this section applies.
After concessions by each party, the issues remaining for
decision are: (1) The value of shares of stock of Williamsburg
Vacations, Inc. (WVI), awarded to Kay F. Gow (800 shares on
February 16, 1989, and 400 shares on February 15, 1990) as bonuses;
(2) whether WVI’s payments of travel and entertainment expenditures
for certain trips taken by petitioners constitute constructive
dividends to them; (3) whether WVI’s payments of expenditures for
the procurement of an animal trophy collection constitute
constructive dividends to petitioners; and (4) whether petitioners
are liable for fraud penalties pursuant to section 6663(a), or in
the alternative, accuracy-related penalties pursuant to section
6662(a).
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Last modified: May 25, 2011