3
the Tax Court Rules of Practice and Procedure, unless otherwise
indicated.
FINDINGS OF FACT
In this opinion, we incorporate by reference the facts set
out in our opinion in Citrus Valley Estates, Inc. v.
Commissioner, 99 T.C. 379 (1992). We set forth and discuss in
this opinion findings of fact arising from the supplemented
record. We also incorporate by reference the supplemental
stipulation of facts.
Lear Eye Clinic, Ltd.
In 1975, Samuel Pallin (Pallin) commenced practice as an
ophthalmic physician in Phoenix, Arizona. His practice grew over
the years, offering various medical procedures performed by
Pallin or other physicians in the practice. He practiced as a
sole proprietor from 1975 until October 1, 1979. From sometime
in 1978 through October 1, 1979, the proprietorship employed
Gerald Walman (Walman) as an associate physician. On October 1,
1979, Pallin and Walman incorporated Lear Eye Clinic, Ltd.2
(Lear). Pallin and Walman owned 51 percent and 49 percent,
respectively, of the Lear stock. The administration of the
medical practice and Pallin's duties and responsibilities did not
change as a result of the formation of Lear. Nor did the
2 Pallin and Walman incorporated the Eye Center, Ltd., and
later changed the name to Lear Eye Clinic, Ltd. For convenience,
the term Lear refers to the Eye Center, Ltd., as well as Lear Eye
Clinic, Ltd., unless otherwise indicated.
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