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decision are whether petitioner was in the trade or business of
gambling during 2002, and whether petitioner is liable for an
accuracy-related penalty under section 6662(a).
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time he filed his
petition, petitioner resided in Tiverton, Rhode Island.
Prior to 1993, petitioner was an operations manager for a
textile firm called Prim/Dritz Corporation. In 1993, petitioner
started Caltex Corporation (Caltex), an S corporation. Caltex is
a textile firm which sells embroidered T-shirts, caps, and other
similar products.
Sometime before 1999, Caltex hired petitioner’s brother with
the goal that, once petitioner’s brother learned about the
textile business, petitioner could reduce his involvement in
Caltex. In 1999, petitioner’s brother took over the day-to-day
operations of Caltex.
During 2002, petitioner was the president and 100-percent
owner of Caltex and worked at Caltex 20 to 25 hours per week
providing “consulting services”. In 2002, petitioner received a
salary of $42,000 and a distribution of income of $99,790 from
Caltex.
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