Alexander M. Moye and Judy H. Moye - Page 18

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                    1990 before it issued stock or held an organizational meeting                                                                                          
                    does not mean it was not incorporated under section 14-2-203 of                                                                                        
                    the Official Code of Georgia Annotated.                                                                                                                
                              In Saxton v. Luke, supra, Forrester and Saxton incorporated                                                                                  
                    Forrester & Saxton, Inc., on October 22, 1979.  The business did                                                                                       
                    not issue stock or file corporate minutes.  On October 24, 1979,                                                                                       
                    Luke contracted with Forrester & Saxton, Inc., for a paving                                                                                            
                    project.  Saxton and Forrester stopped operating their business                                                                                        
                    early in 1980 before they completed Luke's paving project.  Luke                                                                                       
                    sued Saxton and Forrester for breach of contract.  The court held                                                                                      
                    that Saxton and Forrester were personally liable for the debts of                                                                                      
                    the corporation in part because the corporate form could be                                                                                            
                    disregarded to avoid fraud or evasion of contractual or tort                                                                                           
                    responsibility.  The Saxton case does not hold that the owners of                                                                                      
                    a corporation may disavow it when it would be advantageous for                                                                                         
                    them to do so, as petitioners seek to do here.                                                                                                         
                              We conclude that Rosewood Kennels, Inc., was incorporated on                                                                                 
                    February 28, 1990.                                                                                                                                     
                    C.        Whether Petitioners' Corporation Should Be Disregarded for                                                                                   
                              Federal Tax Purposes                                                                                                                         
                              We will not disregard a corporation for Federal tax purposes                                                                                 
                    if it (1) served an intended business function or (2) engaged in                                                                                       
                    business.  Moline Properties, Inc. v. Commissioner, 319 U.S. 436                                                                                       
                    (1943).  The corporation's tax existence is established if either                                                                                      

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