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proprietorship named "Gregory Sims". The return reported that
petitioner received no wage or salary income.
Petitioner worked in the entertainment industry throughout
1989. He provided managerial services personally and through his
wholly owned corporation, The Greg Sims Co., Inc., which changed
its name to Arrowhead Entertainment, Inc., in 1989 or 1990
(hereinafter, The Greg Sims Co., and Arrowhead Entertainment,
Inc. are collectively referred to as Arrowhead). Petitioner was
the only person who provided services for Arrowhead during the
relevant year, and he was its only officer. Arrowhead issued
petitioner a 1989 Form W-2, Wage and Tax Statement, reporting
that it paid him wages of $66,851 during the 1989 calendar year.
Arrowhead issued petitioner a 1988 Form W-2 reporting that it
paid him $88,901 in wages during the 1988 calendar year.
On Arrowhead's 1989 Form 1120, U.S. Corporation Income Tax
Return, filed for its taxable year ended March 31, 1990,
Arrowhead reported a $45,980 deduction for salaries and wages and
a $66,851 deduction for officer's compensation. Arrowhead's 1989
Form 1120 was prepared by Neal Levin and Co. (the Company), and
the Company used Arrowhead's corporate records to prepare that
return. Arrowhead's corporate records were unavailable when
petitioner's 1989 Form 1040 was prepared in 1993. Petitioner's
1989 Form 1040, as it related to his income from Arrowhead, was
based on his estimates derived from memory. Petitioner's memory
is not accurate.
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