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Respondent determined that petitioners are liable for a
deficiency in their 1999 Federal income tax of $4,009, an
addition to tax under section 6651(a)(1) of $1,002.25, and a
penalty pursuant to section 6662(a) of $801.80. The issues for
decision are: (1) Whether petitioners are entitled to deduct a
net operating loss carryover attributable to losses from the
expropriation of four parcels of property by the Iranian
Government; (2) whether petitioners are liable for the
delinquency addition to tax under section 6651(a)(1); and (3)
whether petitioners are liable for the accuracy-related penalty
under section 6662(a).
Background
Some of the facts have been stipulated, and they are so
found. The stipulation of facts and attached exhibits are
incorporated herein by this reference. At the time the petition
was filed, petitioners resided in Los Angeles, California.
Petitioners were citizens and residents of Iran prior to
1988. Petitioner, Nasser Golshani (hereinafter petitioner),
worked as a civilian engineer in Iran prior to 1970. In the
early 1970s petitioner formed Fabris Construction Co. (Fabris)
with two other individuals.1 Fabris did business with the
Government of Iran. From approximately 1970 through 1975,
1 While the record is not entirely clear, the parties
appear to assume that Fabris was a joint venture in which
petitioner had a one-third interest.
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