T.C. Memo. 1996-176
UNITED STATES TAX COURT
STEPHEN D. PAHL AND LOUISE A. PAHL, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 7757-94. Filed April 11, 1996.
Petitioner husband (P), an attorney, claims that
he was not a shareholder in an S corporation organized
for the practice of law. P did not report any of the
income and other items of the S corporation; he also
received an item of nonemployee compensation from the
S corporation, which he claimed he did report.
1. Held: P was a shareholder of the S corporation
for the taxable year in issue and must report his pro
rata share of the income and other items of the
S corporation.
2. Held, further, P failed to report the
nonemployee compensation.
3. Held, further, R’s imposition of an accuracy-
related penalty for negligence under sec. 6662, I.R.C.,
is sustained.
Stephen D. Pahl, for petitioners.
Alan D. Hill, for respondent.
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