- 3 -
exception of the Capizzis, who had no policy insuring either of
their lives) and were each payable to the beneficiaries of the
insured’s choosing in the event of the insured’s death. The
sixth life insurance policy was written on the life of Kerry
Quinn (Ms. Quinn), an employee of VRD/RTD who was its office
manager.
For each subject year, respondent determined in the notice
of final partnership administrative adjustment (FPAA) that
VRD/RTD could not deduct the $585,000 it paid in that year to
STEP as contributions to a welfare benefits fund. The FPAA
stated in part that the payments were not ordinary and necessary
business expenses under section 162(a).
Respondent determined in the notices of deficiency that the
individual petitioners had the following deficiencies in their
1993 and 1994 Federal income taxes:
Individual Petitioners 1993 1994
DeAngelises $246,768 $208,447
Domingos 185,422 184,932
Durantes 29,174 42,020
Capizzis 1,957 1,546
The deficiencies generally are based on two determinations.
First, respondent determined that the payments that the S
corporations made to VRD/RTD for contribution to the STEP plan
were not deductible by the S corporations because they were not
ordinary and necessary business expenses under section 162(a).
Respondent accordingly increased the net amount of passthrough
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: March 27, 2008