- 2 - Deficiencies Income Accumulated Penalty Year tax earnings tax sec. 6662(a) 1995 $307,699 $108,714 $61,540 1996 142,559 --- 28,512 The parties have reached agreement with respect to several issues, and the following issues remain for our consideration: (1) Whether for its 1995 or 1996 tax year petitioner is entitled to deduct officer’s compensation in any amount exceeding $76,800, the amount determined by respondent; (2) whether for its 1995 tax year petitioner permitted its earnings to accumulate beyond the reasonable needs of the business so as to be subject to the accumulated earnings tax; and (3) whether petitioner is liable for an accuracy-related penalty under section 6662(a)2 for 1995 and/or 1996. FINDINGS OF FACT Metro Leasing and Development Corp., petitioner, had its principal place of business in El Macero, California, at the time the petitions were filed in these cases. During the years in issue, George Valente, who was approximately 70 years old, was director and owned 100 percent of the common stock of petitioner. Mr. Valente became ill in 1992 and suffered from prostate cancer during 1995 and 1996. Mr. Valente was somewhat disabled by and 2 All section references are to the Internal Revenue Code in effect for the years in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure, unless otherwise indicated.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011