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James Allen Brown, for petitioner.
Edith F. Moates and John S. Repsis, for respondent.
THORNTON, Judge: By notice of final S corporation
administrative adjustment (FSAA), respondent determined
adjustments of $251,885 and $286,878 to the ordinary income of
Beech Trucking Co., Inc. (Beech Trucking), for 1995 and 1996,
respectively. At issue is the amount that Beech Trucking may
deduct with respect to per diem allowances it provided drivers
that it leased from an affiliated company, and, more
particularly, whether the 50-percent limitation of section 274(n)
applies to the total amount of the per diem payments. Subsumed
in these issues is the question of whether the section 274(n)
limitation applies to Beech Trucking as the recipient of the
services of the leased drivers.
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years at issue; all
Rule references are to the Tax Court Rules of Practice and
Procedure.
FINDINGS OF FACT
The parties have stipulated some of the facts, which we
incorporate herein by this reference.
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