- 2 -
Accuracy-Related
Addition to Tax Penalty
Year Deficiency Sec. 6651(a)(1) Sec. 6662(a)
1994 $5,054 -0- $892
1995 8,413 $234 906
1996 7,828 -0- 870
1997 34,289 -0- 6,858
1998 14,354 -0- 2,871
1999 8,974 -0- 1,795
The issues for decision are: (1) Whether petitioners are
entitled to carry forward claimed net operating losses (NOLs) for
1994, 1995, 1996, 1997, 1998, and 1999; (2) whether petitioners
are entitled to deduct claimed Schedule C expenses for 1994 and
1995; (3) whether petitioners are liable for an addition to tax
pursuant to section 6651(a)(1)1 for 1995; and (4) whether
petitioners are liable for an accuracy-related penalty pursuant
to section 6662(a) for 1994, 1995, 1996, 1997, 1998, and 1999.
These issues arise primarily from facts surrounding claimed net
operating loss deductions that were allegedly generated when
numerous banks foreclosed on five properties that petitioners had
been developing for commercial use.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
1 Unless otherwise indicated, all Rule references are to
the Tax Court Rules of Practice and Procedure, and all section
references are to the Internal Revenue Code as in effect for the
years in issue. All amounts are rounded to the nearest dollar.
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Last modified: May 25, 2011