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Mancusos signed and mailed their 1989 Form 1040 to the IRS Kansas
City Service Center, which received it on August 30, 1990.
GAPS's and JJM's 1989 U.S. Corporation Income Tax Returns,
Forms 1120, were due on March 15, 1990. GAPS and JJM did not
request extensions of time to file these returns, and the IRS
Kansas City Service Center never received them. On September 20,
1992, GAPS and JJM provided unsigned copies of these returns,
bearing their names, to the revenue agent conducting the GAPS
examination (the GAPS and JJM pro forma returns, respectively).
Neither of the pro forma returns showed taxable income or tax
due, and neither GAPS nor JJM made any estimated tax payments for
the taxable year 1989.
OPINION
This case is another banal example of a sole shareholder who
used his C corporations not only to carry on his business but
also as personal pocketbooks without observing corporate
formalities and record-keeping requirements. Petitioner used
GAPS and JJM to pay his and his family's personal living
expenses. Petitioner has claimed some of these payments as
repayments of shareholder loans, thereby not recognizing income
at the individual level, while the corporate petitioners that he
controlled claimed some of the same payments as business expense
deductions, thereby reducing income taxes that should have been
reported at the corporate level. By claiming some of these same
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