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On January 10, 2002, respondent also issued a notice of
deficiency to BHC in which he determined that BHC had not
established that it was qualified to deduct certain claimed
expenses. Respondent also determined that BHC was liable for a
deficiency in its income tax, a penalty, and an addition to tax.
The Basiles and BHC invoked the jurisdiction of this Court
on February 5, 2002, by the timely filing of their petitions.
The Basiles resided in Orefield, Pennsylvania, when their
petition was filed. BHC’s mailing address was the same as the
Basiles’ Orefield, Pennsylvania, address when its petition was
filed. Petitioners’ representative at the time of the filings,
Robert N. Bedford (Mr. Bedford), designated Tampa, Florida, as
the place of trial.
The Basiles’ only allegations of error in their petition are
as follows:
The service based their assessment upon a denial
of legitimate business structures such as corporations
designed to provide legal protections as provided by
the law. The service also denied legitimate business
deductions that are available under Code Section 162.
There is also a question of any assessment at this time
for 1996 because the statute of limitations has expired
for that year.
BHC’s only allegation of error in its petition is that “The
service based their assessment upon a disallowance of certain
expenses.”
On April 5, 2002, respondent’s answers to the petitions were
filed. Respondent denied that he erred as alleged. Respondent’s
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