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registered individual that could be used in emergency situations.
Petitioner testified that he did not consider I.D. Club to be a
corporation because it never filed corporate returns, never had
minutes or meetings, and was not in good standing with the State.
He stated: "this business was not turned on. It was not in
operation. It was all being set up to be turned on, to be a
corporation at some point. This was not an operating system in
1995."
From the time I.D. Club and its predecessors were initially
incorporated throughout 1995, the corporation never had any gross
receipts. However, in 1995, I.D. Club entered into various
agreements with third parties. Petitioner would sign for the
corporation or as its president. No documents were signed in
petitioner's name personally without the corporation listed under
his name. Petitioner took no steps to dissolve the corporation
prior to 1997 when it was automatically dissolved by the state.
Petitioners reported $12,988 of expenses on their 1995
Schedule C for I.D. Club. The expenses consisted of car and
truck expenses of $6,503, legal and professional services of
$1,640, office expense of $1,320, supplies of $418, meals and
entertainment of $532, utilities of $738, and other expenses of
$1,837. Because there was no income reported on the Schedule C,
petitioners claimed a $12,988 loss. Respondent disallowed the
deductions for all of these expenses.
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