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administrative and court proceedings; and (3) whether the
administrative and litigation costs claimed by petitioners are
reasonable.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
Petitioners are husband and wife. They resided in Richardson,
Texas, at the time that the petition was filed in this case.
References to petitioner are to Audrey Kathleen Hennessey.
In 1982, petitioners formed Beacon Telephone Systems,
Inc. (Beacon), a Texas corporation that was an S corporation
for all years relevant here. See secs. 1361(a) and 1362.
Petitioners have been the sole shareholders of Beacon since its
incorporation. According to petitioners, Beacon’s business
involves the manufacture and installation of telephone systems
that control building access. During the years in issue,
Beacon’s clients were located in Lubbock, Texas.
Petitioner was a professor at Texas Tech University (the
University) in Lubbock, Texas, during all periods relevant here.
During her 19-year tenure at the University, petitioner directed
research at the University’s Institute for Studies in
Organizational Automation (the Institute).
In 1982, petitioner started an unincorporated consulting
business, Industrial Scientific & Office Automation (ISOA
Consulting), which shared the same acronym as the Institute.
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