-16-
Commissioner, 115 T.C. 43, 84 (2000), affd. 299 F.3d 221 (3d Cir.
2002).
Petitioner’s testimony is clearly and convincingly
contradicted by the credible evidence in the record. First,
petitioner had during the relevant years a business checking
account in the name of DDL. That account was actively used by
DDL to cash all of the nondiverted checks that DDL received for
services performed by petitioner in his capacity as DDL’s
employee. Second, petitioner filed 1990 and 1991 Federal
corporate income tax returns reporting DDL’s income and expenses
for those years as corporate items. Those returns, which were
signed personally by petitioner in his capacity as a DDL officer,
reveal that petitioner considered himself an officer of a
corporation named DDL and that DDL was realizing income and
incurring expenses as if it were an active and ongoing corporate
business. The returns also reveal that DDL owned assets as of
the end of both 1990 and 1991. Given the additional fact that
DDL during the subject years also reported and paid corporate
estimated income tax to the State of California, we do not accept
petitioners’ claim that the corporate form of the medical
practice was abandoned by petitioner before the subject years.
10(...continued)
positions herein.
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