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G. Notices of Deficiency
On January 31, 2001, respondent timely mailed to Mr.
Tschetter a statutory notice of deficiency for 1995, 1996, and
1997 (the Tschetter notice of deficiency). Also on January 31,
2001, respondent timely mailed to Wolf Creek Farm a statutory
notice of deficiency for its fiscal years ended November 30,
1995, 1996, and 1997 (the Wolf Creek Farm notice of deficiency).
In the Wolf Creek Farm notice of deficiency, respondent
disallowed the food, lodging, and medical expenses deducted by
Wolf Creek Farm, totaling $7,932 for 1995, $8,225 for 1996, and
$6,612 for 1997. Respondent determined that (1) Wolf Creek Farm
failed to establish that the food and lodging expenses were
ordinary and necessary business expenses under section 162 and
(2) those items constitute Mr. Tschetter’s personal expenses.
Respondent further determined that Wolf Creek Farm was liable for
the accuracy-related penalty under section 6662(a).
In the Tschetter notice of deficiency, respondent determined
that payments by Wolf Creek Farm of Mr. Tschetter’s food,
lodging, and medical expenses resulted in constructive dividends
as follows:
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Last modified: May 25, 2011