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3. Whether FabuGlass Was Largely an Operating Company in
1990-94
a. Whether FabuGlass Had Operating Assets, Sales, or
Paid Salaries in 1990-94
FabuGlass reported on its returns for 1990-94 that it had no
operating assets and paid no salaries. This suggests that
FabuGlass was not an operating company. FabuGlass reported total
sales of $30,312 on its 1990-94 returns. That amount is
insignificant compared to the $1,555,057 it reported as net
losses from stock transactions for those years.
b. Whether FabuGlass’ Tax Returns Establish That It
Was an Investment Company
FabuGlass reported on its 1990-95 returns and its first
amended 1994 return that it was an investment company.
Petitioners contend that we should disregard references to
FabuGlass as an investment company on those returns because
FabuGlass was not authorized by its articles of incorporation to
engage in investment activities.
We disagree. First, petitioner, as the sole owner of
FabuGlass stock in 1990-95 and preparer of FabuGlass’ original
1994 return, cannot now disavow those returns without cogent
proof that they are incorrect. Waring v. Commissioner, 412 F.2d
800, 801 (3d Cir. 1969), affg. per curiam T.C. Memo. 1968-126;
Lare v. Commissioner, 62 T.C. 739, 750 (1974), affd. without
published opinion 521 F.2d 1399 (3d Cir. 1975); Kaltreider v.
Commissioner, 28 T.C. 121 (1957), affd. 255 F.2d 833 (3d Cir.
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