Menard, Inc. - Page 7

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               (5) whether Menards and Mr. Menard are liable for accuracy-            
          related penalties under section 6662(a) for negligence or                   
          disregard of rules or regulations.                                          
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated.  We incorporate the            
          stipulated facts into our findings by this reference.4  Both                


               4In the stipulation of facts, petitioners objected on the              
          basis of relevance to stipulations concerning Menards’s officers’           
          compensation for TYE 1999, TMI’s involvement in the NASCAR                  
          Craftsman Truck Series in 2000, and Menards’s sponsorship of a              
          Championship Auto Racing Team (CART) driver in 1999.  We sustain            
          petitioners’ objections.                                                    
               In addition, in the stipulation of facts, both parties                 
          objected to the admission of several accompanying exhibits on the           
          basis of relevance.  Petitioners objected to the admission of               
          Exhibit 36-J, TMI’s 1999 income tax return; Exhibits 61-J through           
          64-J, documents pertaining to Menards’s revolving credit program;           
          Exhibit 65-J, a 1995-96 Indy Racing League season associate-                
          sponsorship agreement between TMI and Green Tree Financial Corp.;           
          and Exhibit 66-J, documents pertaining to Menards’s business                
          relationship with Stanley Tools, including mention of Stanley               
          Tools as a TMI associate sponsor.  We sustain petitioners’                  
          objections.                                                                 
               Respondent objected on the basis of relevance to the                   
          admission of Exhibit 17-J, to the extent that it analyzes                   
          Menards’s officer compensation in years before 1991; Exhibit 75-            
          J, drawings currently used to promote Menards’s Race to Savings             
          sale; Exhibits 78-J and 79-J, 1993 and 1997 Internal Revenue                
          Service Information Document Requests addressed to Menards;                 
          Exhibits 80-J and 81-J, Income Tax Examination Changes for                  
          Menards’s TYE 1991, TYE 1992, and TYE 1994 through TYE 1997;                
          Exhibits 83-J through 92-J, independent auditor’s reports for               
          Menards’s TYE 1972 through TYE 1991; Exhibit 106-J, to the extent           
          it includes diagrams of Menards’s store prototypes other than               
          Prototype III; Exhibit 107-J, a memo to Glidden from Menards;               
          Exhibits 123-J through 127-J and 129-J, magazine and online news            
          articles about racing, printed in 1999, 2000, and 2001; and                 
          Exhibit 128-J, a complaint filed in an unrelated case in 2000 for           
                                                             (continued...)           




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