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The envelopes in which the income tax returns of American Valmar
for the fiscal years in issue were mailed to the Internal Revenue
Service reflect the below-listed postmark dates:
Taxpayer Period Postmark Date
American Valmar 6/30/91 2/12/93
American Valmar 6/30/92 None
American Valmar 6/30/93 12/15/94
American Valmar’s income tax returns for 1991, 1992, and
1993, were received by the Internal Revenue Service on
February 16, 1993, July 6, 1994, and December 19, 1994,
respectively.
OPINION
I. Introduction
The principal issues in this case involve the proper
characterization of various amounts received from abroad by wire
transfer into bank accounts of petitioner American Valmar
International, Ltd., Inc. (American Valmar) and its principal
shareholder, petitioner Valeri Markovski (Markovski). Respondent
disagrees with petitioners’ claim that the amounts received by
American Valmar did not constitute items of gross income because
of American Valmar’s obligation to expend those amounts on behalf
of its clients. Respondent also disagrees with petitioners’
claim that the amounts received by Markovski did not constitute
items of gross income because those amounts were the proceeds of
a hoard of rubles accumulated before Markovski emigrated to the
United States. Petitioners place substantial reliance on
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