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6662(a)2 on, each petitioner’s Federal income tax (tax):
Accuracy-Related
Petitioner Year Deficiency Penalty
Delaware Corporation 1994 $37,794 $3,581.40
1997 12,366 2,473.20
Mr. Barber 1994 6,710 1,342.00
1995 495 99.00
Ms. Havens 1994 12,637 2,527.40
1995 7,285 1,457.00
The issues remaining for decision in these consolidated
cases are:3
(1) Do Delaware Corporation’s payments during 1994 of
certain expenses with respect to a farm in Caroline County,
Virginia (Caroline County farm), constitute for that year con-
structive dividends to Ms. Havens that Delaware Corporation is
not entitled to deduct? We hold that they do.
(2) Do Delaware Corporation’s payments during 1994 and 1995
2All section references are to the Internal Revenue Code
(Code) in effect at all relevant times. All Rule references are
to the Tax Court Rules of Practice and Procedure.
3In addition to the issues remaining for decision listed
below, there are other questions relating to certain determina-
tions in the notice of deficiency (notice) issued to Ms. Havens
(Ms. Havens’s notice) with respect to her taxable years 1994 and
1995 that are computational in that their resolution flows
automatically from our resolution of certain of the issues that
we address herein. Moreover, Delaware Corporation and respondent
agree that the Court’s resolution of certain of the issues
remaining for decision will resolve whether Delaware Corporation
is entitled to a net operating loss (NOL) deduction for 1997 that
is attributable to a claimed NOL carryforward from 1995.
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