T.C. Memo. 1998-419
UNITED STATES TAX COURT
AMERICAN VALMAR INTERNATIONAL LTD., INC., ET AL.,1 Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 11776-95, 11777-95, Filed November 19, 1998.
16318-96, 16319-96.
An individual and his wholly owned corporation
each received wire transfers of U.S. dollars from
within the former Soviet bloc of countries. Ps claim
that the wire transfers to the individual were part of
a ruble hoard accumulated before he came to the United
States and the wire transfers to the corporation were
deposits received in the corporation’s business as a
commission agent. R treated all the wire transfers as
gross income to the corporation and treated the amounts
received by the individual as distributions from the
corporation. R also disallowed certain deductions of
the corporation and imposed accuracy-related penalties
and delinquency additions.
Held: Wire transfers to corporation and some of
wire transfers to the individual are gross income to
1 The cases of the following petitioners are consolidated
herewith: Valeri Markovski, docket Nos. 11777-95 and 16319-96;
American Valmar International, Ltd., Inc., docket No. 16318-96.
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