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respondent determined the following deficiencies in petitioners’
Federal income tax:
Deficiency
Petitioners 1998 1999
Denis H. Dieker, Jr., and Shirley J. Dieker $3,911 $117,495
John R. Pierce and Sandee Pierce 3,911 117,494
Steven A. Nienke and Vickie L. Nienke 32,921 988,914
After concessions,2 the sole issue for our consideration is
whether a liability claimed through petitioners’ S corporation
met the requirements of the “all-events test” including the
economic performance principles of section 461(h).3
Background
These cases were submitted fully stipulated under Rule 122,
and the stipulated facts are so found. All petitioners resided
in Kansas at the time their respective petitions were filed.
Collectively, petitioners own National Contractors, Inc.
(National), an S corporation that operates a construction
business in Wichita, Kansas. At all pertinent times, National
was owned as follows:
2Petitioners concede the deficiencies for the taxable year
1998 and certain other adjustments to income for the taxable year
1999.
3Unless otherwise indicated, all section references are to
the Internal Revenue Code and all Rule references are to the Tax
Court Rules of Practice and Procedure.
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