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references are to the Internal Revenue Code in effect for the
year in issue, and all Rule references are to the Tax Court Rules
of Practice and Procedure.
FINDINGS OF FACT
Some of the facts have been stipulated, and the stipulated
facts are incorporated in our findings by this reference.
Petitioner is a Pennsylvania corporation with its principal
place of business in Havertown, Pennsylvania. Petitioner has
been operating as a family-run mechanical contractor business,
performing heating, air conditioning, and plumbing services since
1918. The business was started by Michael F. Devine and his
brother James Devine. In the mid-1950s, Michael F. Devine’s son,
Richard E. Devine, Sr. (Richard, Sr.), began working for
petitioner. Petitioner incorporated in 1954.
Richard, Sr. held a bachelor of science degree in
engineering. Richard, Sr. began working for petitioner when he
was about 25 years old. Richard, Sr. continued the business
started by his father and his uncle and by 1961 had acquired
100 percent of petitioner’s outstanding common stock. After
becoming the sole shareholder of petitioner, Richard, Sr. had
responsibility for human resources, finances, sales and
marketing, training and supervising employees, and accounting and
legal matters.
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Last modified: May 25, 2011