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After concessions,2 the issues for decision are:
1. Whether TCM had unreported income of $307,696 in 1987
and whether petitioner had unreported income of $308,723 in 1987
and $1,421,218 in 1988. We hold that they did.
2. Whether petitioner is liable for the addition to tax for
fraud under section 6653(b) for 1987 and 1988 and whether TCM is
liable for fraud for 1987. We hold that petitioner is and that
TCM is not.
3. Whether the statute of limitations bars assessment of
tax for 1987 and 1988. We hold that it does not.
4. Whether petitioner is liable for the addition to tax
under section 6661 for substantial understatement for 1987 and
1988, and whether TCM is liable for the section 6661 addition to
tax for 1987. We hold that they are.
Unless otherwise indicated, section references are to the
Internal Revenue Code in effect for the years in issue. Unless
otherwise indicated, Rule references are to the Tax Court Rules
of Practice and Procedure.
2 Respondent concedes that petitioner corporation
overreported interest income by $1,632.73 for 1987, and that
petitioner overreported interest income of $6,359 for 1988.
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