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MEMORANDUM FINDINGS OF FACT AND OPINION
HALPERN, Judge: By notice of deficiency dated February 2,
2001 (the notice), respondent determined deficiencies in
petitioner’s Federal income tax as follows:
TYE 6/30 Deficiency
1995 $161,680
1996 152,933
1997 61,628
The adjustments giving rise to those deficiencies are
respondent’s disallowance of a portion of the deduction
petitioner claimed in each of the foregoing taxable years (the
audit years) for amounts paid to Myra I. Harrison (Mrs.
Harrison), one of petitioner’s officer-shareholders, as
compensation for services. The amounts disallowed (disallowed
amounts) are $808,041, $764,664, and $541,325 for petitioner’s
1995, 1996, and 1997 audit years, respectively. On brief,
respondent concedes a small portion of each of the disallowed
amounts for petitioner’s 1995 and 1996 audit years, so that they
are reduced to $806,467 and $762,019, respectively. We accept
those concessions.
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. All dollar amounts have been rounded to the nearest
dollar.
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