Comtek Expositions, Inc. - Page 2

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               Respondent determined the following deficiencies, additions,           
          and penalties with respect to petitioner’s Federal income taxes:            
                                                       Accuracy-Related               
                                        Addition to Tax     Penalty                   
          TYE July 31      Deficiency   Sec. 6651(a)(1)      Sec. 6662(a)             
          1995             $3,872,347   $960,069.25        $774,469.40                
          1996             5,405,717     1,072,572.62       1,081,143.40              
               After giving effect to various concessions,2 the issues                
          remaining for decision are:                                                 
               1.  Whether petitioner and Crocus International (Crocus)               
          were engaged in a joint venture or joint ventures to conduct                
          trade shows in the former Soviet Union (collectively, the foreign           
          trade shows) during the last 7 months of the fiscal year ended              
          July 31, 1995 and during the fiscal year ended July 31, 1996.               
          Our holding that petitioner and Crocus were not engaged in any              
          joint venture forecloses the question of how joint venture                  
          profits should be allocated between them.                                   
               2.  In the alternative, whether and in what amounts                    
          petitioner is entitled to business expense deductions for the               
          last 7 months of the fiscal year ended July 31, 1995 and for the            
          fiscal year ended July 31, 1996, for amounts paid or payable to             
          Crocus as compensation for its services in operating the foreign            
          trade shows in addition to deductions already allowed petitioner            


               2Petitioner has conceded, among other things, its liability            
          for additions to tax under sec. 6651(a)(1) and accuracy-related             
          penalties under sec. 6662(a) for the taxable periods in issue on            
          any underpayments finally determined.                                       




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