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taxable year ended May 31, 2002, and with respect to petitioners
Paul W. and Charlene R. Wright (Mr. and Mrs. Wright,
respectively; the Wrights, collectively) for their taxable year
ended December 31, 2001, as follows:
Penalty, I.R.C.
Docket No. Deficiency Sec. 6662
8841-05 $8,821 $1,764.20
8842-05 55,562 11,112.40
After concessions by both parties, the issues remaining for
decision are:
(1) Whether disbursements of funds from HJ Builders to
Mr. Wright are constructive dividends or repayments of loans;
(2) whether disbursements of funds by HJ Builders to and on
behalf of the Wrights’ church are deductible by HJ Builders as
charitable contributions of the corporation or should be
characterized as constructive dividends to the Wrights,
deductible as charitable contributions by the Wrights;
(3) whether expenses paid by HJ Builders with regard to a
Lexus SUV used by Mrs. Wright are business expenses deductible by
HJ Builders or are constructive dividends to the Wrights; and
(4) whether HJ Builders or the Wrights are liable for
accuracy-related penalties under section 6662.
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
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