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Court granted this request and again confirmed with Sommers that
the parties had resolved all issues arising out of the notice of
deficiency issued to petitioners. Respondent at that time also
lodged with the Court a signed (by Montgomery and Sommers) copy
of the second stipulation of settled issues. The second
stipulation of settled issues was generally a copy of the first
stipulation of settled issues modified to state the terms of the
settlement of the five issues which were listed in the first
stipulation of settled issues as then still in dispute. The
lodged document stated as to these five issues that (1) for 1993,
petitioners could deduct $158,320 of contract labor in excess of
the $463,577 referenced in the first stipulation of settled
issues (i.e., a total deduction of $621,897), (2) for 1994,
Continuum (and thus petitioners) could not deduct any business
expenses in excess of the $871,480 referenced in the first
stipulation of settled issued, but that Continuum (and thus
petitioners) had to realize additional income of $225,411,
(3) for 1994, petitioners could not under section 1244 deduct any
stock loss as to Quest, (4) for 1993, petitioners were liable for
the section 6662(a) accuracy-related penalty, and (5) for 1994,
4(...continued)
merely states the amount of petitioners’ tax liability for the
relevant years and makes no mention of any specific issue
underlying that liability. The parties’ settlement of the issues
underlying the settlement stipulation, on the other hand, was set
forth in the first stipulation of settled issues and the second
stipulation of settled issues.
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