Rugby Prods. v. Commissioner
United States Tax Court
P is a personal service corporation wholly owned by R, a professional entertainer, and her spouse (now deceased). P took out a disability income insurance policy on R payable to itself.
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P is a personal service corporation wholly owned by R, a professional entertainer, and her spouse (now deceased). P took out a disability income insurance policy on R payable to itself. Held, since any proceeds of the disability income policy would have been excludable from P's gross income under I.R.C. sec. 104(a)(3), the premiums which P paid were not allowable as a deduction, being allocable to a class of income exempt from income tax, as provided in I.R.C. sec. 265(a)(1). Held, further, P is not liable for the addition to tax for negligence under I.R.C. sec. 6653.
1Opinion of the Court
OPINION
NlMS, Judge:
Respondent determined a deficiency in and additions to petitioner’s Federal income tax liability for petitioner’s tax year ended July 31, 1987, as follows:
Additions to tax
Deficiency Sec. 6651 Sec. 6653(a) Sec. 6661
$182,872 $45,090 $9,147.05 $45,718
Respondent’s notice of deficiency, dated March 15, 1991, contains the following notation:
*For returns required to be filed after December 31, 1981 and on or before December 31, 1986, if the * * * [addition to taxj under Section 6653(a) applies, the * * * [addition to tax] under Section 6653(a)(2) will also apply in an amount equal…
2Cases cited4 opinions
- Bass v. John Hancock Mutual Life InsuranceCalifornia Supreme Court · 1974
- Peoples Finance & Thrift Co. v. CommissionerUnited States Tax Court · 1949
- Castner Garage, Ltd. v. CommissionerUnited States Board of Tax Appeals · 1940
- Peoples Finance & Thrift Co. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1950
3Cited by4 opinions
- Robert W. Tschetter v. CommissionerUnited States Tax Court · 2003
- Rugby Prods. v. CommissionerUnited States Tax Court · 1993
- Schmidt v. Comm'rUnited States Tax Court · 2003
- Weeldreyer v. Comm'rUnited States Tax Court · 2003