Joseph J. House - Page 1

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                                 T.C. Memo. 2000-22                                   


                               UNITED STATES TAX COURT                                


                           JOSEPH J. HOUSE, Petitioner v.                             
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      
                        JOSEPH J. HOUSE INC., Petitioner v.                           
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      


               Docket Nos. 8664-98, 8665-98.        Filed January 19, 2000.           

                    P is a former revenue agent with the Internal                     
               Revenue Service and has been a return preparer for over                
               28 years.  P set up J-Co., a wholly owned corporation,                 
               purportedly to conduct his accounting business.  P also                
               set up C-Co. to hide his assets from the Internal                      
               Revenue Service and X-Co. for his wife’s arts and                      
               crafts business.  P conducted his accounting business                  
               at his personal residence.  P’s clients hired him                      
               individually to prepare their returns.  P was not an                   
               employee of J-Co. and was not acting on J-Co.’s behalf                 
               when servicing clients.  J-Co. did not engage in a                     
               substantive business activity.  Neither P nor his                      
               family members maintained personal checking accounts.                  
               P deposited all his gross receipts into J-Co.’s account                
               and paid all his business and personal expenses from                   
               this account without maintaining adequate records to                   
               differentiate between business and personal items.  P