- 5 - at a monthly rental of $500. During 1995 and 1996, Mr. Grey performed the following services for petitioner: 1. Solicited business on behalf of petitioner; 2. Ordered petitioner’s supplies; 3. Entered into verbal and/or written agreements on behalf of petitioner; 4. Oversaw the finances of petitioner; 5. Collected monies owed petitioner; 6. Managed petitioner; 7. Purchased petitioner’s supplies; 8. Obtained clients for petitioner; 9. Maintained customer satisfaction; 10. Performed all bookkeeping services for petitioner; 11. Performed all accounting, bookkeeping, and tax preparation services for petitioner on behalf of petitioner’s clients. During 1995 and 1996, all receivables collected by petitioner were deposited into its checking account. Mr. Grey was the only person with signature authority over that account. During 1995 and 1996, petitioner did not make regular payments at fixed times to Mr. Grey for his services. Rather, Mr. Grey would take money from petitioner’s account to pay for his needs as they arose. Petitioner did not distribute any dividend to any shareholder during 1995 or 1996, and petitioner did not classify any payment made to Mr. Grey as a dividend in 1995 or 1996. Petitioner’s Returns For each of 1995 and 1996, petitioner made its return of income on a Form 1120S, U.S. Income Tax Return for an S Corporation (the Forms 1120S). Petitioner reported ordinary income from business of $33,196 and $24,990 for 1995 and 1996,Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011