Regina Felton, PC - Page 12

                                       - 11 -                                         
          the ownership test.  See sec. 448(d)(2)(B)(i); sec. 1.448-                  
          1T(e)(5)(i)(A), Temporary Income Tax Regs., 52 Fed. Reg. 22768              
          (June 16, 1987), as amended by T.D. 8329, 56 Fed. Reg. 485 (Jan.            
          7, 1997), and T.D. 8514, 58 Fed. Reg. 68299 (Dec. 27, 1993).                
          Accordingly, we hold that petitioner is a qualified personal                
          service corporation under section 448(d)(2) and is subject to the           
          flat 35-percent tax rate for the years in issue.                            
          C.  Addition to Tax                                                         
               Section 6651(a)(1) imposes an addition to tax for failure to           
          file a return by its due date.  Sec. 6651(a)(1).  The addition              
          equals 5 percent for each month or fraction thereof that the                
          return is late, not to exceed 25 percent.  Id.  Respondent bears            
          the burden of production with respect to the addition to tax.               
          See sec. 7491(c); see also, e.g., Swain v. Commissioner, 118 T.C.           
          358, 363 (2002); Higbee v. Commissioner, 116 T.C. 438 (2001).               
          Respondent has met his burden.                                              
               In the absence of an extension, the last date for petitioner           
          to file its calendar year 2002 return was March 17, 2003.  Secs.            
          6072(b), 7503.  Ms. Felton claims to have filed an extension                
          request, but petitioner has been unable to produce any evidence             
          that such a request was sent to the IRS.  Instead of a retained             
          copy, Ms. Felton proffered a “simulated” copy of the extension              
          request filled out on or about March 7, 2006, to demonstrate what           
          petitioner’s extension request would have looked like had one               
          been submitted in 2003.                                                     




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next

Last modified: May 25, 2011