- 4 -
justification issue, there are no factual issues in that respect
to resolve.6 Therefore, we shall proceed on the basis of the
parties’ submissions. For the reasons discussed below, we shall
deny the motions.
Factual and Procedural Background
The parties filed a “Stipulation of Agreed Facts”, which,
with accompanying exhibits, is incorporated herein by this
reference.
Petitioners
Petitioners James E. Blasius (Blasius) and Mary Jo Blasius
are husband and wife who, at the time their petition was filed,
resided in Northville, Michigan. Petitioners Steven G. Balan
(Balan) and Rachel Margules are husband and wife who, at the time
their petitions were filed, resided in West Bloomfield, Michigan.
During the audit years, Blasius and Balan were the sole
shareholders (Blasius, 80 percent, Balan, 20 percent) of
Automotive Credit Corporation (ACC), an S corporation.7
6 Respondent concedes that (1) none of the limitations on
recovery found in sec. 7430(b) limits petitioners’ rights to a
recovery and (2) each petitioner is a “prevailing party”, as that
term is defined in sec. 7430(c)(4)(A), except with respect to the
issue of substantial justification raised by sec. 7430(c)(4)(B)
and herein addressed.
7 The term “S corporation” is defined in sec. 1361(a)(1).
In general, an S corporation has no Federal income tax liability,
and its items of income, deduction, credit, and such are passed
through to (i.e., taken into account by) its shareholders. See
secs. 1363(a), 1366(a).
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011