- 88 -
this where a corporation makes a cash distribution for the
benefit of a shareholder, even when, as is the case here, that
shareholder is also an employee of the distributing corporation.
Section 83 requires a transfer of property in connection with the
performance of services, see sec. 83(a), and, as explained supra,
such a requirement is not met in the case of a distribution.
7. Accuracy-Related Penalties
Respondent determined that each petitioner was liable for an
accuracy-related penalty under section 6662(a) and (b)(1) for
negligence or intentional disregard of rules and regulations.
Petitioners argue that none of them are so liable. Petitioners
assert that they were “approached by various professionals” who
introduced petitioners to the VEBA’s and that they invested in
the VEBA’s relying on “tax opinion letters written by tax
attorneys and accountants and discussions with insurance
brokers”. Petitioners assert that the accountants who prepared
their returns agreed with the reporting position taken as to the
contributions, as evidenced by the fact that the accountants
prepared the returns in the manner they did. Petitioners assert
that many of the issues at bar are matters of first impression,
which, petitioners conclude, means they cannot be liable for an
accuracy-related penalty for negligence.
37(...continued)
is applicable. * * *
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