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Penalty
Year Deficiency Sec. 6662(a)
1993 $114,257 $22,851
1994 171,550 34,310
1995 189,541 37,908
The issues for our consideration are: (1) Whether
petitioners’ solely owned S corporation was engaged in a farming
activity for profit under section 183 for the taxable years 1993,
1994, and 1995; (2) whether petitioners are entitled to deduct
various amounts claimed as contributions; and (3) whether
petitioners are subject to the accuracy-related penalties under
section 6662(a).1
FINDINGS OF FACT2
When they filed their petition, Robert and Karen O’Connor
resided in Corning, California. Petitioners owned all of the
outstanding shares of Omega Waste Management, Inc. (Omega), which
was incorporated in December 1989. Omega filed a Form 1120, U.S.
Corporation Income Tax Return, for 1989. In 1990, Omega elected
S corporation status.
During the years at issue, Omega was a recycling broker and
consulting firm that arranged for hauling of recyclable materials
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the taxable periods under
consideration, and all Rule references are to the Tax Court Rules
of Practice and Procedure.
2 The parties’ stipulation of facts and exhibits are
incorporated herein by this reference.
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Last modified: May 25, 2011