Adrian D. Troutman, Jr. - Page 7

                                        - 7 -                                         
               Ms. Novak-O’Farrell credibly testified that her duties                 
          included purchasing office supplies and business items.                     
          Petitioner’s authorization of her business purchases is evident             
          from the fact that petitioner added her to his American Express             
          account and gave her an American Express card in her name.  It is           
          also evident from the fact that petitioner reimbursed her for               
          purchases made with her own funds and credit card.  Ms. Novak-              
          O’Farrell also testified that petitioner asked her to purchase              
          personal items for him and his family as part of her duties.  Ms.           
          Novak-O’Farrell did not identify any additional agreed-upon                 
          compensation.                                                               
               Petitioner has not established that Ms. Novak-O’Farrell’s              
          personal purchases, made with petitioner’s permission and on his            
          credit card, were intended as compensation.  Petitioner did not             
          report additional compensation for alleged personal purchases as            
          income to Ms. Novak-O’Farrell on a Form W-2, Wage and Tax                   
          Statement, for 1999, the year the purchases were made.  We                  
          conclude that Ms. Novak-O’Farrell’s agreed-upon compensation from           
          T-Foil Enterprises was her weekly wages, plus car payments and              
          gasoline.  Petitioner’s payments of additional, sporadic personal           
          purchases, if any, were likely based on his friendship with Ms.             
          Novak-O’Farrell.  They were not additional fixed compensation for           
          services rendered.  See Anaheim Paper Mill Supplies, Inc. v.                
          Commissioner, T.C. Memo. 1978-86; cf. Commissioner v. Duberstein,           
          363 U.S. 278, 285-286 (1960) (transfer of Cadillac to business              







Page:  Previous  1  2  3  4  5  6  7  8  9  10  Next

Last modified: May 25, 2011