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bank account with SCC. We hold with certain specific exceptions
that SCC did have the additional income determined by respondent;
3. whether SCC is entitled to expenses for construction
costs and general and administrative expenses related to its
homebuilding business during the years at issue in excess of
those allowed by respondent. We hold SCC is entitled to deduct
certain expenses as redetermined herein;
4. whether Mr. Strong had additional income for the years
at issue for constructive dividends from SCC, deposits of SCC’s
funds for his personal use, and the corporation’s payment of his
personal expenses. We hold he did as redetermined herein;
5. whether Mr. Strong is liable for the fraud penalty
under section 6663 on his underpayment of tax for each of the
years at issue. We hold he is;
6. whether SCC is liable for the addition to tax under
section 6651(f) for fraudulent failure to file timely on its
underpayment of tax for each of the years at issue. We hold that
SCC is not liable for the section 6651(f) addition to tax; and
7. alternatively, whether SCC is liable for the addition
to tax under section 6651(a)(1) for failure to file timely tax
returns. We hold that SCC is liable for the section 6651(a)(1)
addition to tax.
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