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After concessions,2 the issues for decision are:
(1) Whether Sam Kong Fashions, Inc. (Sam Kong Fashions),
failed to report gross receipts of $391,885.75 and $303,918.75
for the taxable years 1994 and 1995, respectively;
(2) whether Sam Kong Fashions incurred additional unreported
deductible business expenses during the taxable years 1994 and
1995;
(3) whether Sam Kong (Mr. Kong) received and failed to
report constructive dividends from Sam Kong Fashions totaling
$391,885.75 in 1994 and $303,918.75 in 1995;
(4) whether Sam Kong Fashions and Mr. Kong (petitioners) are
liable for fraud penalties pursuant to section 6663 for the
taxable years 1994 and 1995; or, in the alternative, whether
petitioners are liable for accuracy-related penalties pursuant to
section 6662 for the taxable year of 1995; and
(5) whether the period of limitations bars the assessment
and collection of the deficiencies in taxes and penalties that
2 On brief, respondent concedes that the unreported gross
receipts of Sam Kong Fashions, Inc., which were determined in the
notices of deficiency, should be reduced by $7,047 in 1994 and
$5,600 in 1995. Also, respondent concedes that the unreported
constructive dividends of Sam Kong, which were determined in the
notices of deficiency, should be reduced by $7,047 in 1994 and
$5,601 in 1995. Respondent’s concession with respect to Mr.
Kong’s 1995 unreported constructive dividend appears to be a
typographical error because respondent concedes $5,600 of
unreported gross receipts of Sam Kong Fashions in 1995, but
concedes $5,601 of unreported constructive dividends in 1995 for
Mr. Kong.
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Last modified: May 25, 2011