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substantial business activities. See Skarda v. Commissioner, 250
F.2d 429, 434-435 (10th Cir. 1957), affg. 27 T.C. 137 (1956).
Further, a corporation is not treated as carrying on a business
if its activities, such as executing contracts and filing tax
returns, are merely "empty gestures" rather than substantial
transactions. Kimbrell v. Commissioner, 371 F.2d 897, 901-902
(5th Cir. 1967), affg. T.C. Memo. 1965-115.
The following factors lead us to the conclusion that IRA did
not carry on any business.
We first observe that the original Cedilla Co. paid minimal
salaries or wages in 1977 ($986) and 1978 ($5,051). After the
name change in 1979, IRA paid minimal salaries or wages only in
1981 ($9,969), and 1982 ($26,079) and paid no salaries or wages
in any other year. In fact, there is no evidence that IRA had
any employees other than bookkeepers who also performed
bookkeeping services for the multitude of other Kanter entities.
Although the original Cedilla Co. paid substantial commissions
and consulting fees from 1976 to 1979, after the name change, IRA
paid commissions only in 1981 ($115,400) and in 1985 ($4,000) and
paid consulting fees only in 1982 ($29,000).
The original Cedilla Co. paid officer's fees in 1977
($19,300) and 1978 ($15,000). After the name change, IRA did not
pay any officer's or director's fees (except the $12,500 payment
made to Ballard).
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