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Deficiencies Penalty
Year Sec. 4941(a)(1)1 Sec. 4941(b)(1) Sec. 6684
1993 $ 9,894 -- --
1994 14,156 -- --
1995 17,531 -- --
1996 20,756 -- --
1997 23,981 -- --
1998 27,206 -- --
1999 30,431 $1,217,240 $1,361,195
The issue for determination is whether petitioner was a
substantial contributor who engaged in prohibited acts of self-
dealing with the Irene Cafcalas Hofheinz Foundation (Foundation)
during the years in issue.
FINDINGS OF FACT
Petitioner resided in Houston, Texas, when he filed his
petition.
On December 1, 1989, Bluff Creek Corporation (Bluff Creek)
was incorporated pursuant to Texas law. Petitioner’s wife,
Rosalind Graham, was the sole beneficial owner of Bluff Creek’s
stock until November 1992, when she became the sole shareholder.
On December 8, 1989, Bluff Creek purchased a house (the
residence) for $630,000. Petitioner and his wife lived in the
residence from that date through 1998.
Beginning in mid-1992, petitioner developed a business
relationship with Fred Hofheinz. Mr. Hofheinz was a businessman
and attorney in Houston. Mr. Hofheinz was also the trustee of
1 All section references are to the Internal Revenue Code
in effect for the years in issue.
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Last modified: May 25, 2011