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Accuracy-related
Additions to Tax Penalty
TYE July 31 Deficiency Sec. 6651(a)(1) Sec. 6662(a)
1992 $5,143 $1,029 $1,029
1993 14,124 3,531 2,825
1994 43,837 10,959 8,767
After concessions by the parties, only one substantive item
remains in issue. The parties dispute whether petitioner can
deduct $100,000 in compensation paid to petitioner’s sole
shareholder and his sons after the close of petitioner’s fiscal
year ended July 31, 1994. We hold that petitioner is not
entitled to the deduction for that year.
Petitioner also challenges the late-filing additions to tax
and the accuracy-related penalties determined by respondent. We
sustain respondent’s determinations.
FINDINGS OF FACT
Most of the facts have been stipulated and are so found.
The stipulation of facts and related exhibits are incorporated by
this reference.
Petitioner’s principal place of business was Kansas City,
Missouri, when it filed the petition in this case. Petitioner is
in the business of transporting trucks from manufacturers or
dealers to other dealers or end-users. Doyce Gentry was the sole
shareholder, officer, and director of petitioner, and had sole
check-writing authority over petitioner’s bank accounts. At all
relevant times, petitioner was an accrual method taxpayer using a
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