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also transferred funds from this account to the
accounts of C-Co. and X-Co. to allow other family
members to use the funds for personal purposes. P
reported all receipts from his accounting services on
J-Co.’s return, then deducted all business and personal
items therefrom, disguising most of the items as “cost
of goods sold”. J-Co. paid no tax. P did not report
any income from J-Co. on his return for 1994, nor did
he report income from the payment of personal expenses.
Held: J-Co. is a sham, and we disregard it for tax
purposes. Petitioner’s gross receipts, less allowable
business expenses, are includable in his income. Held,
further: P is liable for the fraud penalty under sec.
6663, I.R.C.
Joseph J. House, pro se.
John J. Comeau, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
LARO, Judge: These cases are before the Court consolidated
for purposes of trial, briefing, and opinion. Joseph J. House
(petitioner) and Joseph J. House, Inc. (JJH) separately
petitioned the Court to redetermine respondent’s determinations
of the following deficiencies in Federal income tax, addition to
tax, and accuracy-related penalties:
Joseph J. House, docket No. 8664-98
Accuracy-related penalty
Year Deficiency Sec. 6662(a)
1994 $32,921 $6,584
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