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of the taxpayers, or the purpose of creating the corporation was
not a business purpose. See Commissioner v. Bollinger, 485 U.S.
340, 344-347 (1988). None of these exceptions apply here.
In Skarda v. Commissioner, 27 T.C. 137 (1956), affd. 250
F.2d 429 (10th Cir. 1957), a taxpayer claimed that a corporation,
which had previously been operated as a partnership, should be
disregarded because no corporate activities such as shareholder
meetings, adoption of bylaws, elections of officers, preparation
of minutes, issuance of stock, or transfers of title to property
by the partnership to the corporation had ever occurred. The
taxpayer had filed articles of incorporation, and a certificate
of incorporation was issued. The business activity of the
corporation was limited to the publication of a newspaper,
maintenance of a checking account, setting up books that
reflected a capital stock account, the receipt of supplies, and
the extension of credit. This Court concluded that, even though
corporate formalities were not adhered to, the entity held itself
out to the public as a corporation and conducted some business in
the ordinary meaning. See id. at 145. Therefore, the corporate
entity could not be disregarded.
In Doe v. Commissioner, T.C. Memo. 1993-543, affd. in part
and revd. in part on other grounds 116 F.3d 1489 (10th Cir.
1997), taxpayers, who owned stock in a corporation that managed a
bar and bowling alley, sought to disregard their S corporation
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