- 3 - existence, BMC elected to be treated as an S corporation. BMC maintained a bank account with Corestates Bank (BMC account), and petitioner deposited $59,609.62 into this account during 1996. BMC did not file a 1996 Form 1120S, U.S. Income Tax Return for an S Corporation, to report the $59,609.62 as gross receipts. The deposits into the BMC account were not reported as income on petitioners’ 1996 return or otherwise accounted for by petitioners. Nationwide Home Improvement Limited Petitioner was also the sole shareholder and sole corporate officer of Nationwide Home Improvement Limited (NHIL) during 1996. NHIL conducted remodeling services and aided customers in securing financing for improvements. Petitioner filed a Form 2553, Election by a Small Business Corporation, to change the status of NHIL from a C corporation to an S corporation effective as of January 1, 1996. The Internal Revenue Service (IRS) approved the election in 1995. During 1996, petitioner provided management services to NHIL, working about 20 to 30 hours per week. These services included petitioner’s meeting with clients and conducting sales for NHIL. NHIL paid $20,680 to petitioner as compensation for the management services provided. On NHIL’s return, the preparer, Joseph M. Grey (Grey), treated this amount as compensation paid to an officer.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011