- 3 -
1995, respectively (the audit years).1 On brief, respondent
concedes the deductibility of all but $140,776 and $19,450 of the
disallowed amounts. We accept such concession, and, thus, with
respect to the principal adjustments, we need decide only the
deductibility of such remaining amounts for the audit years.
Petitioner also argues that, because respondent’s rationale
with respect to the principal adjustments changed subsequent to
the notice, respondent has raised a “new matter” with respect to
the principal adjustments, with respect to which respondent bears
the burden of proof.
Finally, we must also decide whether petitioner is liable
for the accuracy-related penalties determined under section
6662(a).
Unless otherwise indicated, 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.
FINDINGS OF FACT
Some facts have been stipulated and are so found. The
stipulation of facts, with attached exhibits, is incorporated
herein by this reference.
1 The deficiencies also reflect adjustments to petitioner’s
deductions for FICA taxes and charitable contributions, which are
derivative of the principal adjustments and are not directly
disputed by petitioner. We do not further discuss those
adjustments.
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