Terrell Equipment Company, Inc., et al. - Page 2




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                       MEMORANDUM FINDINGS OF FACT AND OPINION                        

               VASQUEZ, Judge:  Respondent determined the following                   
          deficiencies in, additions to, and penalties on petitioners’                
          Federal income taxes:                                                       
               Petitioner Terrell Equipment Co., Inc.:                                
                 Additions to Tax          Penalty                                    
          Tax Year               Sec. 6653  Sec. 6653  Sec. 6653    Sec.              
          Ended    Deficiency   (b)(1)(A)  (b)(1)(B)    (b)(1)     6663               
          9/30/87    $162,029     $121,522      1         ---       ---               
          9/30/88      65,423        ---       ---      $49,067     ---               
          9/30/89      84,891        ---       ---        ---     $63,668             
               1  50 percent of the statutory interest on $162,029                    
               Petitioners Vernon W. Griffin and Janet M. Griffin:                    
                 Additions to Tax          Penalty                                    
             Sec. 6653  Sec. 6653  Sec. 6653    Sec.                                  
          Year    Deficiency   (b)(1)(A)  (b)(1)(B)    (b)(1)     6663                
          1987     $56,169       $42,127            1         ---       ---           
          1988      50,696         ---        ---      $38,022     ---                
          1989      33,994         ---        ---        ---     $25,496              
               1  50 percent of the statutory interest on $56,169                     
          Unless otherwise indicated, all section references are to the               
          Internal Revenue Code in effect for the years in issue, and all             
          Rule references are to the Tax Court Rules of Practice and                  
          Procedure.                                                                  
               The primary issue for decision is whether petitioners are              
          liable for the additions to tax and penalties for fraud.3  If we            


               3  Sec. 6653(b)(1), the successor to sec. 6653(b)(1)(A) and            
                                                             (continued...)           





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