Notice: Eighth Circuit Rule 28a(k) Governs Citation of Unpublished Opinions and Provides That They Are Not Precedent and Generally Should Not Be Cited Unless Relevant to Establishing the Doctrines of Res Judicata, Collateral Estoppel, the Law of the Case, or if the Opinion Has Persuasive Value on a Material Issue and No Published Opinion Would Serve As Well.jon J. Paulson; Gloria J. Paulson, Appellants, v. Commissioner of Internal Revenue, Appellee, 994 F.2d 843 (8th Cir. 1993)

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US Court of Appeals for the Eighth Circuit - 994 F.2d 843 (8th Cir. 1993) Submitted: April 30, 1993. Filed: May 5, 1993

Appeal from the United States Tax Court.

Before FAGG, BEAM, and HANSEN, Circuit Judges.


Jon J. Paulson and Gloria J. Paulson, husband and wife, appeal from the tax court's1  decision finding P Quad Company (P Quad) a sham entity and sustaining deficiencies and penalties assessed by the Commissioner on the Paulsons' 1986 federal income tax. This appeal raises many of the same questions we addressed and rejected in Paulson v. C.I.R., No. 92-2750 (8th Cir. May 3, 1993) (per curiam). For the reasons set forth in that opinion, we reject the Paulsons' challenges to (1) the tax court's finding that P Quad was a sham entity; (2) the tax court's denial of the Paulsons' motion to amend their petition to include a claim for a net operating loss carryforward; and (3) the imposition of self-employment taxes. We also reject, on the basis of the tax court's opinion, the Paulsons' claim that the tax court erred by sustaining the Commissioner's imposition of penalties against them for negligently underpaying their taxes and for substantially understating their income tax under 26 U.S.C. §§ 6653(a), 6661(a).

Accordingly, we affirm. See 8th Cir. Rule 47B.


The Honorable Mary Ann Cohen, United States Tax Court Judge