Joseph D. & Elizabeth M. Dunne - Page 3

                                        - 3 -                                         
               (5)  whether petitioners failed to report a $15,000 capital            
          gain on their 1999 Federal income tax return.  We hold that they            
          did not, because we find that respondent’s determination as to              
          this item was arbitrary; and                                                
               (6)  whether petitioners are liable for additions to tax               
          under section 6651(a)(1) for 1997 and 1999.  We hold that they              
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated and are so found.               
          The stipulated facts and the accompanying exhibits are                      
          incorporated herein by this reference.                                      
               Petitioners resided in Sanford, North Carolina, at the time            
          they filed their petition.                                                  
          FRC International, Inc.                                                     
               Mr. Dunne incorporated FRC in Delaware in 1982.  FRC’s                 
          principal place of business was Holland, Ohio.  FRC was in the              
          business of selling fire protection material, particularly a                
          chemical called halon, through contracts with the Federal                   
          Government.  FRC was an S corporation for all relevant periods.             
               Mr. Dunne was FRC’s sole shareholder from the time of its              
          incorporation until 1993.  Mr. Dunne was also a director and an             
          employee of FRC.  In 1993, Richard Marcus became a 50-percent               
          shareholder of FRC while Mr. Dunne continued to own the remaining           
          50 percent.  Mr. Marcus also became the president of FRC and                

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next 

Last modified: March 27, 2008