- 3 -
determined by respondent. We hold that they are taxable on
capital gains of $103,791.
Third, we decide whether petitioners may deduct expenses
claimed as business expenses by the OMK trusts. We hold that
they may not.
Fourth, we decide whether petitioners are liable for self-
employment taxes on compensation paid to the OMK trusts by
Pacific Island Ministries (P.I. Ministries). We hold that they
are.
Finally, we decide whether petitioners are liable for the
accuracy-related penalty under section 6662(a). We hold that
they are.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the accompanying exhibits are
incorporated in these findings by this reference. When the
petitions in these cases were filed, petitioners, who are
married, resided in Grass Valley, California, where, at that
time, they conducted the activities of the OMK trusts.
A. Petitioners’ Missionary Service in New Guinea
In the spring of 1959, Mr. Kooyers had an epiphany and
believed himself called to serve as a missionary. At the time,
petitioners were teaching in northern California. After
obtaining releases from their teaching contracts, petitioners
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