Ragnhild A. Westby - Page 63

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               (b) For 1988, petitioner documented $5,113.77 of payments to           
          the IRS ($4,034.98) and the Minnesota Department of Revenue                 
          ($850.90) and deposits into petitioner’s payroll account                    
          ($227.89) covering the months of February, May, July, August, and           
          October 1988 (Ex. 39-R, lines 652-664).  Of the amounts                     
          documented, petitioner concedes that $1,200.97 was deposited into           
          the payroll account (and presumably was claimed as a wage                   
          deduction), and respondent concedes the deductibility of the                
          payments to the Minnesota Department of Revenue.                            
               (c) For 1989, petitioner documented $3,068.20 of payments to           
          the IRS ($2,324.64) and to the Minnesota Department of Revenue,             
          the Minnesota Department of Jobs, the Minnesota UC Fund, the                
          Commissioner of Revenue, and the Employee Benefit Administration            
          ($743.56) (Ex. 40-R, lines 257-266).  Respondent conceded the               
          deductibility of all of these payments.                                     
               (d) For 1990, petitioner documented $11,253.01 of payments             
          to the IRS ($9,888.44), the Department of Revenue ($1,167.19),              
          and the Minnesota Department of Jobs ($197.38) (Ex. 41-R, lines             
          809-838) but provided no information regarding the nature or                
          purpose of the payments.  Respondent has not conceded that any of           
          these payments is deductible.                                               
               (e) During each of the years at issue, petitioner paid wages           
          to employees and had an obligation to pay the employer’s share of           
          Federal Insurance Contributions Act (FICA) and Federal                      






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