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decisions regarding the terms and structure of the cash transfers
involving PK Ventures and its subsidiaries, PKVI LP, Zephyr, and
the Zephyr purchasers. Consequently, any argument as to Rose’s
reliance on the advice of tax professionals for the treatment of
these cash transfers as debt rather than equity contributions or
distributions is unconvincing.
Based upon our analysis of the relevant facts and
circumstances of these cases, we conclude that respondent’s
imposition of accuracy-related penalties against the Roses must
be sustained if the recalculation of the Roses’ income tax
liabilities for 1990 through 1993 gives rise to substantial
understatements of income tax for those years.
We have considered the arguments of the parties that were
not specifically addressed in this opinion. Those arguments are
either without merit or irrelevant to our decision.
To reflect the foregoing and the concessions of the parties,
Decisions will be entered
under Rule 155.
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