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deficiency for the years in issue in which respondent disallowed
the above claimed bad debt deductions to the extent the
deductions claimed on the tax returns were based on delinquent
loans with respect to which the automobiles securing the loans
were repossessed or returned (or identified as unlocatable) after
the end of the year for which, for Federal income tax purposes,
the related bad debt deductions were claimed. The total amounts
of petitioners’ claimed bad debt deductions disallowed by
respondent for each year were allowed to petitioners by
respondent as bad debt deductions for the immediately following
year.
Respondent also, in the notice of deficiency issued to ABC,
disallowed the inventory write-downs claimed by ABC for its 1990
and 1992 tax years.2
In addition, respondent determined against petitioners
accuracy-related penalties under section 6662(a).
2 Respondent’s notice of deficiency for 1990 issued to ABC
also reflects a related sec. 481 adjustment that appears to be
mechanical and not in dispute.
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Last modified: May 25, 2011