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8. Whether Lakewood is liable for the addition to tax for
failure to file timely determined by respondent under section
6651(a). We hold it is.
9. Whether we should grant respondent’s motion to impose a
$25,000 penalty against each petitioner under section
6673(a)(1)(B). We hold we shall not.
Unless otherwise indicated, section references are to the
Internal Revenue Code applicable to the relevant years, Rule
references are to the Tax Court Rules of Practice and Procedure,
and dollar amounts are rounded to the dollar.
FINDINGS OF FACT
I. Overview of Petitioners
Neonatology is a professional medical corporation wholly
owned by Ophelia J. Mall, M.D. (Dr. Mall). Its principal place
of business was in New Jersey when we filed its petition. Dr.
Mall and her husband, Mr. Mall (collectively, the Malls), resided
in New Jersey when we filed their petition.
Neonatology reports its income and expenses for Federal
income tax purposes using the cash receipts and disbursements
method and the calendar year. It reported the following relevant
amounts on its 1992 and 1993 Federal corporate income tax
returns:
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