- 4 -
that form, Western’s 1998 tax year ended on November 30, 1998.
In the March 19, 2001, letter, respondent stated that Western was
not an S corporation. In a letter to Mrs. Arnold dated June 5,
2002, respondent noted that Western had filed an S corporation
return for 1999 even though respondent told petitioners before
they filed that return that Western did not qualify as an S
corporation. In that letter, respondent referred to two revenue
rulings which provide relief to some corporations which make a
late S corporation election or an inadvertent termination.
Respondent asked petitioners to respond if they believed that
Western qualified under either revenue ruling.
In a letter to the Taxpayer Advocate Service dated December
26, 2003, Mr. Arnold asserted that petitioners’ original S
corporation election for Western was valid.
C. Mr. Arnold’s Accounting and Tax Preparation Activities and
Pacific Controller, Inc.
On a date not stated in the record, Mr. Arnold organized
Pacific Controller, Inc. (Pacific), an S corporation he owned.
During the years in issue Pacific used Controller International,
Inc.’s employer identification number. Controller International,
Inc., is the same entity as or the predecessor entity to Pacific.
The last tax return filed by Pacific was for a tax year ending
January 31, 1997.
Mr. Arnold assigned to Pacific the payments he received from
customers for his personal accounting services. Pacific has
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011