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those forms, and section 530 relief would not be available. See
Western Management, Inc. v. United States, 45 Fed. Cl. 543, 553-
554 (2000); see also General Inv. Corp. v. United States, 823
F.2d 337, 341 (9th Cir. 1987); Pariani v. Commissioner, T.C.
Memo. 1997-427.
Petitioner’s guiding argument is relatively simple and may
be stated as follows. If petitioner is not recognized as an
corporate entity for tax purposes, it was not required to file
Forms 1099, and Dr. Katz, then operating as a sole
proprietorship, would not have been an employee. Dr. Katz,
therefore, would not be an employee of his own proprietorship.
We turn to that question.
2. The Corporate Entity
As a general rule, a corporation is recognized as a distinct
taxable entity from its shareholders even though it has only one
shareholder who exercises total control over its affairs. Moline
Properties, Inc. v. Commissioner, 319 U.S. 436 (1943). This
recognition extends to corporations formed to perform personal
services rendered by its shareholders. Keller v. Commissioner,
77 T.C. 1014 (1981), affd. 723 F.2d 58 (10th Cir. 1983).4 There
are, however, situations where the corporate entity will be
4 The decision in Keller v. Commissioner, 77 T.C. 1014 (1981),
affd. 723 F.2d 58 (10th Cir. 1983), turns on an allocation of
income under sec. 482. For there to be a sec. 482 allocation,
however, there must be two or more recognizable entities.
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