Eugene A. Beck, et al. - Page 19




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               Respondent determined that the following payments by Beck's            
          Liquors were constructive dividends to Mr. Beck:                            
                                             1991        1992       1993              
          Condo association fees               1,276      1,014         980           
          Insurance-condos, vehicles           3,687      1,866       1,830           
          Diverted corporate income           74,453     115,133     84,782           
          Credit card--personal expenses      14,095     14,993      16,193           
          Auto expense/repairs                10,152      7,294       4,679           
          Miscellaneous                         -0-         378         254           
          Advertising/personal ticket use        200        200         200           
          Condo utilities                      1,098      1,398       1,580           
          Other personal expenses             15,237      5,239       2,221           
          Property taxes                       1,780      1,750       3,296           
          Annual meeting expenses            1,461       2,183      1,626             
          Total                              123,439     151,448    117,641           
               As a result of respondent's determination that Mr. Beck                
          received constructive dividends from Beck's Liquors in each of              
          the years at issue, respondent determined that Mr. Beck underpaid           
          his taxes in 1991, 1992, and 1993, respectively, in the amounts             
          of $28,517.92, $41,509.00, and $30,649.00.                                  
                                       OPINION                                        
          Issues 1, 2, & 3:  Whether Beck's Liquors Is Liable for the Fraud           
          Penalty Under Section 6663(a) for Each of the Years at Issue, and           
          Whether Mr. Beck Is Liable for the Fraud Penalty Under Section              
          6663(a) for Fraudulently Understating His Income on His 1991                
          Federal Income Tax Return and Under Section 6651(f) for                     
          Fraudulently Failing To File Federal Income Tax Returns for 1992            
          and 1993.                                                                   
               Respondent asserts that Beck's Liquors is liable for the               
          fraud penalty under section 6663(a) for each of the years at                
          issue, and that Mr. Beck is liable for the fraud penalty under              
          section 6663(a) for fraudulently understating his income on his             






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