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Additions to Tax
Year Deficiency Sec. 6653(b)(1) Sec. 6661
1988 $47,881 $37,298 $11,970
Addition to Tax Penalty
Year Deficiency Sec. 6651(a)(1) Sec. 6663
1989 $36,620 $5,306 $27,465
Penalty
Year Deficiency Sec. 6663
1990 $21,488 $16,116
The issues for decision are:
(1) Whether petitioner received unreported constructive
dividends from Moran General Contractors, Inc. (the corporation),
by diverting corporate receipts and issuing corporate checks for
fictitious expenses in the amounts of $149,747 in 1988, $84,315
in 1989, and $100,890 in 1990;
(2) whether petitioner received additional unreported
constructive dividends during 1988, 1989, and 1990 of $11,233,
$20,439, and $8,060, respectively, from the personal use of the
corporation’s property;
(3) whether petitioner is entitled to deduct under section
162,1 as expenses of an unincorporated beauty shop business of
which he was a proprietor, payments of $11,500 in 1989 and
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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Last modified: May 25, 2011